In markets like Houston, I think it's more of a speculative bet.

But I AM saying that if you are speculating in real estate, you should be very careful where you have flat or negative population growth because your expectations of appreciation are unlikely to be met.

@Lee CruzI had successfully tried fix and flip, and even a more speculative major remodel (triple the sqft), and then new spec home building and hadn't been dreaming of being a landlord.

And this using a 203K FHA loan in the brutal market of Boston, on the east side of the Port Norfolk bay area.Facts & Numbers:2 beds & 2 baths on each of the 3 unitsPurchased for $655K @ 5% down-payment and a generous dose of 203K closing feesTaken a 30K cushion for the 203K streamlined rehabLocked in 4.25% @ 30 year interest rateAppraised at 750KThe numbers are certainly not the exquisite definition of what a ground-breaking deal stands for, but they certainly fare decently well in this seller's market where cash investors rule, the inventory is constantly challenged and most properties are getting sold for over asking price, taking advantage of the current interest rates, the Everett Casino construction, and a few other speculative but pragmatic plays.Just like most everyone else that was not raised or surrounded by real estate professionals from a young age, this deal was pretty much riddled with small mistakes here and there, from neglecting the fire department smoke and carbon detector regulations, being over-optimistic on the underwriting guidelines, underestimating the cost opportunity due to all sorts of processing delays, and you name it.Currently free from tenants, the expectation is to add value by rehabilitating the under-developed basement, adding 2nd and 3rd floor balcony decks, and a variety of practical and aesthetic fixes.

It seems pretty speculative to buy now for investment, unless you somehow walk into a property that is way below market, or perhaps needs major renovation.

Speculation is purchase with the hope that the economy does well or you bust.

In addition one of the tenants had a headache so they speculated there was a carbon monoxide leak.  

This is pure speculation on his part, though he may be right. 

But I would speculate that Dallas would be similar judging from how many friends invest there.If you live in Dallas I would start there.

Socal has the appreciation factor but its not a guarantee and its more speculation and leaves your success in the hands of something out of your control, i wouldnt consider that a business.