Is Real Estate a Good Investment Right Now?

In 2016 when I bought my first buy-and-hold rental property, the US was experiencing a balanced housing market and healthy economy – it was possible to build a rental portfolio of cash-flowing properties.

Over the past few years, with rising home prices, it was harder to acquire rental properties without overpaying**. But what’s often overlooked is that those higher prices were offset by low interest rates, which reduced buyers’ mortgage payments.** The housing market was actually more balanced than it might appear for investors using leverage to acquire properties.

Now rent prices are increasing while mortgage payments hold steady at low interest rates. Many investors are now reaping the benefits of their decision to buy — even though they may have paid more than they wanted to.

Above is the only part that I can relate to :slight_smile: However, I can’t see how author arrived at conclusion below:

A combination of adjusted housing prices, relatively low fixed interest rates and rising rents makes now a promising time for investors to buy.

House prices merely adjusted 5-10% downward whereas house prices should be decreased by 18-20% because of the increased mortgage payment (for a 20% down 30-yr fixed). Rising rents? Is only good for existing landlords. Doesn’t make sense to buy a rental now. I did an analysis on a potential in Austin.

Price: $450k
For 20% down 30-yr fixed at 5.26%, PITI + HOA = $3065.
Market rent = $2350.
I would be subsidizing the tenant, notwithstanding I have to pay for PM, maintenance & repairs, and account for vacancy and reserve for future appliance replacement and renovations.

I bought a condo last yea for $280k. Rent is $2100. Hoa is $325. About a 4.5cap. Now worth $350k but only to a homeowner not an investor. $450k seems like a poor investment for $2350/m rent.


Condo in Tahoe?

Yes South Lake Tahoe 2/1 1000sf. Older building but one block from the beach and surrounded by bars and restaurants. Plus it has a pool

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Real estate investment can be a good option for some individuals, but it is important to carefully consider the potential risks and rewards before making a decision. Benefits of real estate investment may include appreciation in value, rental income, and potential tax benefits, but it is important to also consider the possibility of value depreciation and costs associated with owning rental property.

Aug 25, 2022

Since above Aug 25 post, price of some houses have dropped 25%+ in certain zip codes in N/NW Austin/ suburbs. Most decline 15-20%. Hot promising zip codes, decline ~10% only. Location, location, location :+1:


In Bay Area I’m now seeing:

  • some SFH closing at under 2017 prices.
  • Tier 2 and 3 fell the most.
  • Luxury homes in tier 1 neighborhoods have very high variance. Some are selling at even higher prices than summer peak while some fell to 2018 levels.
  • Inventory remains extremely low.
  • Houses priced right (meaning low) are still moving relatively quickly.

This means if and when inventory comes back, prices can plummet further.

There is very little MFH transactions and they haven’t gone down much but literally very little data and inventory for any reasonable price discovery.

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What zips are you seeing below 2017 prices?

Not any specific zip code. Just look at last 15 / 30 day sales and you will find quite a few, based on the zestimate curves.

i think i can help with this

Be careful what you wish for. A crash is always wished for by buyers. Probably unlikely. Especially since development and construction costs have skyrocketed Ann’s there is still a housing shortage where people actually want to live.

Crash has happened already. Both in price and sale transaction. Has since recovered. Another crash? In price or sale transaction?