I could lose 20%-30% in the next recession, that's not going to feel good.

-You can diversify your portfolio should a housing downturn/recession occur.

When a recession comes, people get scared.  

@Caleb Bryant - A lot of what I'm seeing some on the market are deals that people bought empty or nearly empty after the recession that have already been repositioned. 

We haven't felt real pain from a recession since the 1970's when the Moon Mission finished up.

Recessions are caused by shocks to the system.  

I'm personally expecting another market recession very soon and am focusing solely on cashflow with zero appreciation.

I also agree that REITs are more likely to track with the stock market than housing, directly, as I have seen that in my own portfolio.A direct short is a hard thing to figure, but maybe you could modify your strategy a bit by focusing investment on the businesses that benefit from a bad real estate market: Moving companies, discount retailers, waste disposal companies.Here is a good list of businesses that do well in recession.

The problem is not usually one property, the risk usually lies with buying multiple properties via credit, those of who went through the great recession with properties got an eye opening lesson in that risk.  

I bought it right before the recession in '06, and have long since regretted the decision.2.