"I think I'll wait until prices come down to buy"

I have been hearing this a lot lately.  Housing prices are high, so it isn't a good time to by a STR.  That is faulty thinking, and I'll tell you why.

1.  You are only looking for one good deal.  You are not investing in the entirety of real estate, as if it is a mutual fund.  There are good deals presenting all of the time, regardless of the overall market.

2.  Prices are falling largely due to interest rates climbing.  Yes, you might buy that same house cheaper in a year, but the increase in your financing costs may well outweigh the decrease.

3.  Even if you pay way too much for a property, you are still going to be fine if you 1) Buy quality, and 2) Hold for the long term.  

In 2005, I paid $240,000 for a cabin just before the financial crisis.  At the time, annual rents were around $20,000.  In 2009, the cabin appraised for around $150,000 - a 40 percent decline in value.  But by then, it had already thrown off over $100,000 in rents.  As of today, it is produced over $500,000 in rents, and now averages $45,000 to $50,000 per year.  

What is the property "worth" today?   Might have been $800K two months ago, $750,000 today.  Who knows.  But who cares?  I just plan on enjoying the income off of it from now on.  Other people paid it off.  Some years it might do $40,000, some years $50,000.  It doesn't really matter, because I bought it for the long haul.

So should you.  And now is as good a time to find a deal as any.  Good luck!