To start or not to start?

[Michael Lutz]

Hello BiggerPockets community,

I have been listening to the bigger pockets podcast for awhile now and I've been interested in buying my first property. However, I live in LA where prices are high, and I'm still not sure if its a good investment. I keep going back and forth with the numbers, and different assumptions give different results. The question is, which assumptions do I want to go with? I can see that even though prices are high right now, using conservative estimates for appreciation, expense growth and income growth (2% each on income calculator), it comes out to $100,000 of equity after 4 years. This seems pretty good to me when renting means I'll never see that money again! However, if expenses increase while property value and income remain stagnant, then this house would be a liability rather than an asset. So, my question is, which of these scenarios are more likely, and how can I best estimate the risk/reward potential?

Here the PDF of the report generated from bigger pockets rental property calculator.

https://drive.google.com/open?id=0BynpBcQ6WGU_d25hQ1JVMjdVZ3M

Thanks for your input!