Originally posted by @JD Martin:
The risk to buy & hold in a housing downturn is if rental demand goes soft and/or rents decrease, AND you depend on rents being at a certain level in order to pay yourself/pay for your properties. If both of those conditions are true, you are at greater risk than someone who owns rental property in a situation where only one of those conditions are true. Further, the greater your obligations, or the greater the cash flow you require to live/stay solvent, the greater your cash reserves need to be to ride out the downturn. Leverage is a great thing, but there are going to be people (some/many of them here on BP) that are going to be shaken out of real estate in the next downturn, wherever they are. If you own a property outright, your only absolute expense is taxes, property insurance (unless you're crazy), and basic upkeep of a vacant house (utilities, grass cutting, whatever). If you're in a low-cost area, that might not be more than $100/month. Even in a bad economy, you should be able to find a renter for $100/month.
Always beware the shiny object syndrome.
If my only strategy right now is to build cash, credit and knowledge and wait until the next crash so that I can buy properties on the courthouse steps is that the wrong approach ???
As long as we don't see hyperinflation the price of everything will double in 20 years as seen through history.
"As we saw the Average annual inflation rate is 3.22%. That doesn't sound too bad until we realize that at that rate prices will double every 20 years. That means that every two bars on average prices have doubled or about 5 doublings since they began keeping records."
https://inflationdata.com/Inflation/Inflation_Rate...
So buying and holding is the best approach as long as I can maintain the cash flow to support it.
