However, what I found from personal experience with my family was the asset managers for the property management companies could and often did over-inflate prices in areas that had limited availability.

.• Type: Condo, high rise, single family, duplex, single story, two story, etc.• Configuration: Two bedroom, three car garage, mud room, etc.• Location: Usually a very specific area.

This assumption implies that rent will rise faster than expenses and that's certainly not guaranteed.Whether this is a good deal or not depends on your goals.

Prices rise.

It's more questions and considerations, and might interest you..http://www.biggerpockets.com/blogs/4579/blog_posts/32645-if-ca-h-is-king-then-leverage-is-god---loans-cash-roe-roi-and-riskThere are a million indeces, but for real estate specifically, I think looking at affordability indeces, how loose loans are (either through Federal Reserve loan surveys, % of subprime or low-doc loans), and consistency of % real estate price gains far exceeding inflation for a sustained period, are all risks to look for..Also, when you hear your dentist, then your mechanic, then your landscaper, then your landscaper's assistant buying up and preaching the wonders of real estate investments.. when it's the topic of conversation of every cocktail party.. and when it's the only asset class everyone wants to be in.. you know the market is getting frothy..!

I grew up in Ann Arbor also, and it has always seemed like it didn't decline, and it's been rising a lot recently (with Google and others moving into town, and all those highrises downtown).

What I was told is that most of the time tax appraisals unless recently audited (or updated) generally stay behind the curve due to people making improvements/additions but not reporting to keep the annual tax lower and that the general county tax increases are behind inflation making this harder to trust as a true market value.

Now I have a chance to see how real million dollar houses rising up from obscurity and I appreciate that.

My area (Northern VA) is experiencing a lot of growth and the trend can be seen in rising home prices.

There are so many reasons, but here are some of the highlights:  (1) they are valued on the sales comp. approach; (2) they are hard to finance because they are valued on the sales comp. approach (comps are hard to find); (3) it's much harder to find deals on them (more sophisticated owners with inflated senses of value); (4) they tend to be clumped together as opposed to interspersed in SFRs, the result is that other landlords actions have a much more significant impact on the operation of your property; (5) you don't achieve any economies of scale (they're too small); (6) they are more management intensive (anytime people share walls, there's always going to be drama); (7) they tend to be illiquid (see point 2); (8) they have more turnover than SFRs; (9) unless you're getting good deal on one, they don't cash flow that well; (10) a lot of them have owner paid water.