Interesting numbers for buy now vs wait for crash debate
I have a hand full of rentals in the area. Rents have steadily increased. I will include my currently longest held rental (not the one I had before but sold though the rent appreciation is the same).
Bought: about 150K 7 years ago at bottom of market.
Cash flow at time: $50 a month
Principal payment at time: $230 a month
Current value: 330K (180K appreciation)
Current cash flow: $1,000 a month after ALL expenses, reserves for vacancy, capex, etc....
Current principal payment: $300 a month
So in just 7 years rents increased enough that I went from making $50 a month cash flow to $1,000 a month cash flow.
My other rentals are continuing to increase in rents too....
Here is my big point.
If I buy 6 more rentals (available loans I have currently after selling some off) and sit on the properties for say 7-10 years, I project between principal pay down and cash flow after increasing rents over that decade will be $1,500 a month combined per each of those 6 properties...9K a month just for THOSE new purchases. Let's add another 6K a month from current 4 properties between increased rents (cash flow and principal pay down) and I'm looking at 15K a month between cash flow and principal pay down (I consider PPD a form of tax advantaged savings).
So regardless of what prices do, let's see what those additional 6 properties would net me a year toward the end of that 7-10 year time frame: 108K a a year! Now I'll run this through a spreadsheet but let's just say conservatively I'd be making 50K a year for the 6-9 years prior to that 108K year after inflation and time do their thing. On the high time frame but yet conservative end of profit expectations years prior, I'm looking at 558K over that period just from rental profits/PPD, not counting what housing prices do. And that's just the 6 additional units.
Is it just me or is buying now while rates are still low not such a bad idea after all? What am I missing/not factoring in? I figure in 7 years I merely made 180K from value appreciation on the rental in my example broken down earlier...Sure appreciation is realllllllly nice. But I am starting to think waiting for a crash is costing me money in opportunity costs....
Appreciation is nice in RE...but time is also nice, so is having your tenants pay the loans off over 30 years.
Or am I thinking about this wrong, missing something here?