Quote:
Originally Posted by wildwoods
If a person buys rental property with he sole hope of gains coming from said rent, then it's a bleak investment. Like anything the trick is timing. A properly bought horse is 50% sold. But low sell high. In this boom bust market, stews purchasing can lead to incredible return. There are risks but traditionally is a sound move. I would suggest nobody to purchase if you can't afford to sit vacant for a few months.
My $.02
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Any investment that does not return a fair annual compensation and relies entirely on a gain in the capital asset's value is generally a very poor investment. Unless you are 100% certain the gain in capital value is going to exceed 10% a year I would never buy it. Even bare land should return 8-10% a year from surface rights or land lease for farming, storage etc PLUS capital appreciation.
The reason most people invest in rental property is to build themselves a monthly annuity plan so they have income in retirement. If you start far enough in advance, buy right and can get adequate rents this makes sense. If rents no longer represent an 8% return on the current value of the property, sell it and invest in something that will give you that return.