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      10-31-2008, 02:07 AM   #21
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Originally Posted by vAnt826 View Post

From just July of this year to September houses in King County have dropped over an average of $40k in value and is still in a downward trend.

Rumors are already flying around today about another rate cut.

All these factors just make it too damn volatile to invest in any homes right now.

Sure you can go ahead and buy a rental property right now, but what if the average price of homes drop another $40k in King County? Thats another $40k that you don't have to finance or about $87k (6%) after 30 years! That's not including potential rate drops that might happen in these next couple of months.

The best play right now is to WAIT.
It doesn't matter if the price drops another $40k - you might miss an opportunity on a good rental property today. Nobody is disputing that purchasing a rental property today will be a profitable decision - you're just trying to time it to maximize the profit, which may or may not work out. Just find a good property at a good price, invest in it and manage it for a few years at a loss before turning it into a profitable asset. Rates are fine today! You can always refinance if they drop even lower... I refinanced my current home 6 months after I purchased it when rates dropped from 5.875% (5/1 ARM) to 5.125% (5/5 ARM). With the refinancing costs, the break-even point was 10 months. After that, it results in a savings of $200/month. Am I kicking myself over purchasing when I did? Nah, long term it doesn't really matter since I'll be renting it out in a few years and holding onto it. It's not like we're not going to get some real estate booms in the coming decades, it's cyclical. You should be even less worried about purchasing a rental property today than a home for yourself, since you'll probably hold on to it for a longer time and the rental market is booming right now because people with crap credit and crap incomes can't (thankfully) buy houses anymore and so they need to rent.