I understand your concern about the HOAs that could be running low on cash... That is particularly true in Florida where the vacancy rate is so high... Many places no longer have enough residents to pay for standard maintenance concerns. My area is considerably different, It looks to me that we may have passed the bottom for the time being, I see less for sale although prices are not yet firming. I only invest in the highest quality properties, which doesn't mean the highest price properties. The good locations have near 100% occupancy and very high collection rate on HOA dues so the lack of funds isn't a problem here. We also have distressed areas with higher vacancy rates and more payment problems but I don't invest in those areas. Real estate is not very liquid like buying or selling a stock... You can't get out right away if you need to get rid of it so my first and top priority is ALWAYS a quality assessment. If I would not be comfortable to live in one of my properties I would sell it and I did exactly that last year and recently replaced it with a higher quality property.
As far as the return... The 11.2% I mentioned is a gross return with 12 month occupancy. Our leases are always 12 months. That doesn't mean that no one ever leaves in less than 12 months but we tend to have tenants for many years. Taking taxes, insurance and HOA dues into account my return on this latest addition is about 9%. As you go down in quality or the desirability factor goes down the return goes up... You can buy house trailers and get them paid for in two years or less! Anyway, all rents are in my mail box on time and I don't have to go out asking for it... I like it that way.
The economy seems to be slowly improving but the spread between the haves and the have nots is also getting wider. My leases are with the haves... above average income tenants that have decided not to own a home. Obama is killing the very people he is trying to help... With all the money printing everything is going up in price and real estate will follow as well. The people with assets will see their net worth increase and the people at the lower end of the economic scale are screwed. They don't have assets that will go up and are finding it harder to buy food and gas. I am buying properties from people that made bad investment decisions and I will probably be blamed later for taking advantage of those that had their creative financing deals fall apart.
If we have a major financial collapse similar to Greece then owning stuff rather than paper will put you far ahead of the game. For me the highest priority is to increase net worth and to do it with solid assets that will withstand widespread economic hardship. If you are buying make sure that you can afford it even if it stays empty... That way you won't get hurt if you have to wait.
Socialism works until you run out of other people's money
