09-16-2008, 03:40 PM
[quote Jimmypoo]I would never consider rental property where the rental income didn't cover at least 80% of the mortgage, and the depreciation / appreciation didn't more than make up for the other 20%!
Well, at that time "appreciation" was 20% YoY, and the re-litters were calling it a new paradigm. "Real Estate never goes down!"
It doesn't take a genius to figure out that not only was 20% a-year appreciation not going to last, but eventually 50% reductions were going to have to happen at some point, or it would take 1000 year mortgages to buy starter homes.
Well, at that time "appreciation" was 20% YoY, and the re-litters were calling it a new paradigm. "Real Estate never goes down!"
It doesn't take a genius to figure out that not only was 20% a-year appreciation not going to last, but eventually 50% reductions were going to have to happen at some point, or it would take 1000 year mortgages to buy starter homes.