Yes SD R, I totally agree. Buying with all cash in a low rate high price environment is definitely not for me. However, I think most who did that bought for cash because that allow them to actually buy the property at a good price. There’s no way to know if they refi out after they purchase. I think they would if they decide to hold and rent. For those of us who were not able to drop down several hundred thousands of dollar for investment properties, then yes, 2008-2011 was a great opportunity.
I’m still not sold that price will go down when rate goes up. Just look at what price did in 1970-1980. Rate sky rocketed and so did price. When you get income increasing 10% a year, it’s pretty easy to afford higher monthly payment. Obviously, past performance does not guaranty future performance. However, I don’t buy the logic of lower price when rate increase. Maybe it’ll be different this time, but like you said, if you’re holding it as rental and already are cash flowing positive, who cares. All this mean is you’ll be cash flowing even better every year. Which would make it that much harder to sell, since the cash flow is so good.
Again, I sincerely hope CAR is right and we’ll see sub 2008 price again (hopefully soon). Being able to pick up SFR house in MM in the low to mid $200k would be another golden opportunity that I’m not missing. This is assuming that PITI is lower than 2008’s PITI.
