You are right in that your IRR (not average returns, IRR) will decay in real estate, but again flawed in thinking that there are not ways to reallocate capital into advantageous holdings, and further flawed in thinking that this is a big detractor from investing in real estate.

The only thing I can do is discourage people from trying to become a real estate investor.Well this post counteracted with one person (me) because you just made me even more hungry for success.

Sign of the times......sigh....Decaying value LOL Almost everything is ironic these daysMore like burning man

Water will destroy your building by causing decay and mold. 

It simply does not work that way where I am at and you have to go through rules and procedures.They sound nothing more to me than a professional tenant that is now counter claiming damage to counter act you trying to seek damages against them.

Sure it some what counter acted with deductions and taking deprecation but not fully.

If you do go to the rough end, then you can somewhat counteract some of the roughness by moving further down closer to the point & Cabrillo beach.

However prices rising are also counter acting rising rents. 

Even just a couple hundred dollars per month positive will help counteract that.I always advise my investors that you have to think in terms of worst-case scenario... what if you lose your job?

Aluminum sliding windows the tracks decay in my area in ~40-50 years.