On Feb 21, 12:01*am, Dan wrote:
On Feb 20, 8:13*pm, Larry Dighera wrote:

On Wed, 20 Feb 2008 18:40:15 -0800 (PST), Dan wrote in
:

The long term average for real estate appreciation is 5%, after
accounting for inflation.

To do as well in the stock market it would have to yield 25%
appreciation, unless you're buying on margin.....

We're getting off-topic here, but this is a interesting one...

I see your point, however this is based on the assumption that market
rent can pay for _all_ of the following.

1. Payments on an 80% LTV mortgage.
2. Property Taxes
3. Insurance (including liability risk)
4. Repairs, maintenance, and upkeep
5. Homeowners association bills (if applicable)
6. Property managment company (or you could handle the 3am calls
yourself)
7. Also pay for the carry time required when between renters
8. Real-estate commissions when it comes time to sell.

Can market rent pay for all of this? *I doubt it, but honestly I have
not done extensive research. *Is anyone doing this who cares to share
with the group? Granted, #6 could be done by the owner...

*--Dan

I have a rental unit that I purchased at the height of the RE boom.
Bought it 100% financed with a 10 year interest only loan. Now the
market has tanked. I owe much more than the property is worth. The
payment exceeds the rent that I can collect. The last renter skipped
out on the last 2 months' rent, took our couch and a vacuum cleaner.
This after she let her kids overflow the tub and flooded the kitchen's
ceiling. We patched and painted the ceiling ourselves, because the
handyman wanted much more than a fair price. This renter also killed
our washing machine by washing her kids $300/pair sneekers and a way
too big comforter and arearug in it. We ended up having to buy a new
set washer and dryer because we wanted someting that matched and also
knew that the dryer is pretty old.

The new tenants are good people, but the rent just wont cover the
mortgage payment, so we have negative cashflow every month and
negative equity to boot. Since the new tenant moved in, we had to
install a new hot water heater because the hot shower only lasted 5
minutes. The plumber said it was calsium buildup. Oh yea, we also
had replace the shower plumbing because the mixing valve stopped
mixing.

Other than that, RE is an excellent investment.

Wil