Many people, including myself, have asked this question. I have spent many months debating this and am still unsure about the answer. So, this is more like a discussion within my writings rather than a full answer for you. In short, if you can get a property that is low enough in price, is rentable, and you can take a 30-40% in rent costs in the future - it is a good buy. The reason I say 30% to 40% is because, as we all know, in the current market prices could go down.

I have been reading many books and one that stands out is Harry S. Dent’s book, “The Coming Depression.” This book uses demographics to predict the future. While this might not be 100% accurate, it will give you a better look into the future. This demographer says that we are at a point where we have more people in older generations than those in younger generations. This means that the baby boomers will be supported by less “echo boomers.” This means that there could possibly be less people renting, driving rent prices down. Also in the wake of all this is the future fewer places needing to be rented, which will cause an excess of properties. Thus, driving prices down even lower. However, if you get the price for low enough and a 40% in rent, it is a 100% sure buy. At least to me it is a for sure buy.

What if this guy is wrong? The way I look at it, I have better chances of him being correct because his past predictions of this credit melt down and the dow having a run up after the year 2000. Because he was correct, I have to assume he will be right again with his predictions. If he is wrong, I only loose additional capitol. If he is right, I will not stand to loose capitol.

Note: He also predicts that housing prices will fall AFTER a small run-up in the coming months/year.