Buy and Hold Question

[Jason Merchey]

A Realtor said this to me: Real estate will still be a good purchase at full market value b/c of the appreciation we will see over the next 2-3 years. Took 4 years to lose 30% in value, and it'll only take 2-3 years to gain it back.

Does anyone think that this is true or false? Should we be ashamed buying at market price for a buy/hold?

[Sam W.]

If an investment depreciates by 30% it must then apprecitate by 43% just to get back to even. Do I think real estate (across the board) will appreciate 43% in the next 2-3 years? Nope.

Of course a realtor wants you to pay full market price.

You must look at your objectives. For me, cash flow is key (when dealing with buy and hold rental property). If market value doesn't allow acceptable cash flow, then I can't buy it...the carrying cost is too high for the "promise" of appreciation down the road.