investors with significant initial investment are at little risk in a correction unless there is a material significant loss of income impacting the ability to cover the annual debt service, OpEx, and capital expenditures. almost all commercial lenders stress underwrith loans with higher interest rates compared to current, higher OpEx, and higher capital expenditures. i do the same decision analysis for my clients prior to pitching a deal to a lender. devaluation does automatically mean financial distress when rent hasn't decreased or decrased rent continues to cover OpEx, debt service, and capital expenditures.

The company I work for manages approx. 100 units in the LA area and the average expenses for our stabilized properties run around 40% of rental income, less vacancy expense (this does not include principal & interest, and I used three years of data to average out the expenses, so I would figure a bit higher to include all possible capital expenditure items.)

Personally I use 10% for vacancy, maintenance, CAPEX (capital expenditure - new roof, hot water heater, a/c, furnace, etc...), and then 12% for property management.Go to www.rentometer.com and you can see how your current rent fairs with the rest of your market.

Any such expenditures would count toward that investors contribution to do the split calculation above.

Price 179,00Down payment: 10%Interest: Principal onlyGross monthly income: $1,500Loan terms: 30 yearsClosing cost: $4,000Property tax: $90/monthHomeowner insurance: $70/monthVacancy: 5%Repair maintenance: 5%Management fee: 5%Capital expenditures: 5%

It would be great to save yourself the expenditure and hassle of booking at peak season when you already own an apartment in your favorite holiday destination.

If it were a house, you would still have to account for long term capital expenditures.

Is this some kind of scam like I buy the land and then I get socked with a bunch of back taxes and fines and penalties or something, or it's Indian burial land and I'm forced to build a 5-star cemetery on it, and I can't get out of it? 

I believe this will will make for a solid 2015 for everyone I work with.I'm also considering selling my primary residence to pay off my HELOC, free up a ton of more capital to invest with, and reduce my monthly expenditures significantly.

@Ronin Crimmons In response to your earlier questions about the "MANY" other expenses and what CapEx refers to: CapEx is short for "Capital Expenditures," which are the larger improvements you may need to make to the property, like a new roof, HVAC, replacing the water heater, appliances, components (garage doors, circuit breakers, etc.), structural issues, etc.