Just got apartment # 5....3 more till retirment

[crestedbutte]

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Alternatively, house prices plummet. Rental rates are now too high and go down. His net worth takes a dive. He loses his extra cash on a downswing in poker and has to foreclose or sell at low prices.

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Actually, when housing prices go down, people stop buying and rent instead to wait out the decline. This causes apartments and rentals to fill thus making rents go up.

If he's cashflow positive and building a reserve, he can wait out the downswing. It doesn't matter how he does in poker.

I have a friend who was negative $30-40k a month with his apartment buildings during the housing boom. Everyone was buying, nobody was renting, his vacancy rates were sick. Now, in housing the downturn everyone is renting, he's 100% filled and his rents have all been increased. I estimate he's at +200k a month now and sitting pretty. [img]/images/graemlins/cool.gif[/img]

BTW, he was buying like crazy when all apartments were empty!