I've heard from many people that rents tend to increase with inflation, so rental property is kind of an inflation hedge.

My thought, or hope, is that if the area is composed of good construction and a good location (by location I mean proximity to down town or some other place people need to be at-not locations as in "this is a nice neighborhood")then property prices will at least keep pace with inflation and probably do better if the area is currently depressed (undervalued).I am not going to wait for the profits from my first house to buy my next house.

If I keep paying $1k difference, it's the same as holding onto the property for over 6yrs not taking into account opportunity loss, inflation etc..

I would hate to walk away from a deal that nets 14%, but walk away b/c I am over inflating maintenace and vacancy.

Some idiot left a (ball check) in place fully inflated on the 3" line.No wonder water form the tubs wasn't draining.Apparently there was work done to the kitchen 7 to 8 years ago before I bought it a few months ago.The plumber says the ball check is to check holding water and pressure test and then is supposed to be taken off and a regular line used or just remove the ball and cap the pipe.Instead he said many times dry wallers just goes over it before the plumber comes back and the plumber says screw it and leaves it.I just couldn't believe it but the plumber has found this before on other properties he has worked on.

These were the days of 10-12% interest on notes and HIGH inflation.

And, if you're betting that inflation will eventually kick in at some point and rents will go higher, nothing will do better for appreciation than multi family.

I guess you cold argue that SoCal is over inflated and the rule *should* hold true but these values are sustaining, and the market is turning.

Prices of houses skyrocket, CEO's get huge bonuses for inflated profits as they create the faulty mortgages and resell them to fannie/freddie.The govt (i.e. taxpayer) then has to bail out all these crazy banks and prop up the mortgage companies (fannie/freddie) that are taking all their bad loans back.And, then, the govt is going to turn around and give thesebig banks/funds huge discounts on these houses so theycan make money on their own bad deals AGAIN!

I didn't inflate the price at all.