Market Crashes... What's the Big Deal?

[James G.]

Hi BP. If I have a rental property (Let's say a 4plex) and the market crashes, what's the big deal? Won't I still have my tenants in there paying my rent every month, thus I'll still be getting equity in the property? I understand that the value of my home will go down temporarily, but in the long term, does it really matter if the market crashes once I have my property? I read book after book where investors lose all of their money when the market crashes, but this never really made sense to me, since they should still be getting the same monthly checks. Please excuse my ignorance, can anyone explain?

[Jay Hinrichs]

depends on location in the 08 meltdown.... many markets landlords experienced 100% vacancy  other markets were not affected at all.

areas that were very heavy in new construction like AZ FLA GA VEGAS landlords had plenty of vacancies and I know first hand investors that had 4 plexs in AZ that lost them to the bank bbecause of 100% vacancy.

I am not predicting another meltdown like 08 by any means just stating fact