Also while many of the high income areas have far exceeded the peak of a decade ago, the lower income areas are less than 50% of their price from a decade ago.But over time, prices go up and down, and with a long trajectory will always go up because their is no fighting the economic force of inflation.

Check their rents on the local market to see if it's close to pricing, don't inflate them.

Instead of, or in conjunction with, other savings vehicles, consider just ONE rental property and all the benefits of the right property will offer over time: Cash Flow, Amortized Equity, Passive Activity Losses that "may" lower your W2 tax bill if you have less than $125k earnings, benefits of inflation in that not only are tenants paying down mortgage debt and rents increase over time, the debt itself becomes devalued, costing less in actual dollar terms.

As far as I can tell, the benefits with the 30 year are:Interest is deductibleDue to inflation, the cash that Im using to pay the monthly payment in 20 years won't have the same buying power as the monthly payment does today.  

If it's based on inflated market values and the sponsor has no cash equity at stake, you should stay away.The other problem is that in a down market, the loss severities can be substantial.  

(Not to mention 2% inflation expense every year.)The real question becomes, will tenants go through the hassle of moving due to a 2 - 5% rent hike?

When I told him my much lower assessment of the property's value, he offered to find me a lender who would finance based on the wildly inflated sales price.

Assuming the market stays the same, you want to be able to sell your primary residence in a year or two and make a profit (not just accounting for inflation or appreciation).

Can utilities be added as an extra to the rent in the lease to not inflate the lease price?

In order to diversify a bit, I've started looking at small 8-15 unit apartments.My question was very similar to yours: is A class worth the price increase because of some of the inflation protection and potential crash protection?