When to buy rental houses?

[Mel Park]

Yes, nobody has a crystal ball I know.  However, I'd really like to add 3-5 rental homes to my portfolio.  Obviously things are very hot right now. Homes going for over asking, etc so I've refrained from buying anything.  But I'm wondering - if now is not the time - when is?  A crash like 2008 - I don't see in the cards in the near future.  Population in metro areas is growing, and is forecasted to keep growing.  I'm starting to think that I have to either  buy now, at high prices......... buy later - but at today's high prices plus some appreciation.....OR wait for that magic moment when things crash - - but God knows how long I'll be waiting because eventually, I'd like to start making some money.   Any thoughts? 

[Bill B.]

Your post brings up an interesting idea…

I’ve seen 100’s of posts on BP saying you shouldn’t buy properties based on the idea that prices will go up (they call it appreciation.) But.  IF you believed that I don’t think it would be logical for that person to believe you shouldn’t buy now because prices might go down. I don’t know how elated it is, but if the argument really is don’t buy now because of future value that should be true up or down…

As we all know. “The best time to buy real estate was twenty years ago.” But if that’s true. Then 20 years from now, today is the time to buy. I think I could make a good argument for not buying in a market where prices are decreasing. Heck, I might even make that argument for markets where prices are “stable”. 

In closing. If you aren’t willing to buy at today’s prices. How many years will you wait for them to go down? What if they’re never lower than today, do you never buy? Are you going to have to play a mind game about how it’s been 10 years and prices are only up 25% so they’re a better deal than back in 2021?

I guess the way I always thought of it was I only paid my downpayment, the rest is paid by tenant. So if the property is worth more than my downpayment when the loan is paid off, I made money. On top of all the rental income of course.