Originally posted by @Andy Luick:
You simply can't count on appreciation...it may never come. In your case, why not just sit on the house and let your renters pay it off for you? You just refinanced.....why if you were thinking about selling in a year? There is a potentially large correction coming in real estate and that equity you think you have will be swallowed up either on the property you have now or the two you are thinking of buying...which will then be upside down. If you keep the current property which seems to have performed well....you ride it out on that one, while you build up to be able to purchase the next one AFTER the correction at cheaper prices. Many disagree with me and that's fine....but plan conservatively or switch to shared housing which has less risk than single family rentals and higher net rents. Either way, as Jacob posted on another string.....appreciation is just icing on the cake....when you get it AWESOME but don't count on it...and if you do.....your profitable deal on paper become a loser in real life.
Good post, I agree with you, i do believe a correction is coming, but with investors now having to put more skin in the game and not being able to drive up prices like they did years ago with no money down products and loose lending requirements, i dont think it will happen this year maybe 2 or 3 years down the road and that also depends on what region you are talking about, we didnt really feel the crash out here and we didnt experience the double digit appreciation either , i wasnt thinking of selling when i refinanced, a few months after i did it, my tenant moved out so that got me to thinking about changing my goals, i was in a 6.15 30year loan still paying pmi, so the fixed 15yr @ 4.375 was a better deal for me, and yes counting on appreciation is not good because its not guaranteed, i may end up keeping it because I like the idea of having it paid for in 15 years.
