I buy for longterm appreciation, but aim a bit lower in the rental market. Depending on where you are, you should probably be able to find breakeven or positive properties, especially with 20% down.
don’t where you are, but if you are investing and counting on appreiciate then you should have sufficent resources and/or excess income to put into the property. While I don’t think the RE market is going to plummet tomorrow.
Also, you need to calculate at what point are you really making a profit. IMHO, many people do this incorrectly. If you pay $100k to day and sell it for $140k in 3 yrs it might sound a great investment. …but if you pay 5% commission to sell and you have say $300 neg. per mon after taxes, insurance and reapir. Then you have really only made about $22k. That’s a nice return on your $20k investment, BUT you need 12% appreciatation to get that return. Depending on what market you are in, that may or may not be do-able.
My point is work the numbers and see if the final result is what you want.
one other point is that you will pay about 6% interest on teh $20k down which is about $3.5k over the next 3 years. After tax that about $2.5kin cost… So in the example above, you profit is now less than $20k even thought the house has gone up $40k.