If real estate is going to fall 20% like the gloom and doomers say then he is fixing to be down 120k of that 600k. If he bought this house for 200k 30 years ago or put 200k in a cd and let it compound 30 years ago, today he would have roughly 800 k in the account versus a 600k house that can lose 120k value during a downturn. If you throw in maintenance costs, new water heater, ac unit, heater, paint, etc and vacancy, advertisment, paying a leasing agent, then he is probably not even makng $200 a month.
\ Can't speak for Ireland or Australia...but the South of Spain is littered with British people and the amount of new building there when I was there a few years ago made it look like Southern California...I'd guess that was due to the expectation that millions of British would be retiring down there. Perhaps that's where that correction is coming from. Billboards are often in English and they advertise the Golf Course lifestyle, that smacks of British or Americans.
Only if you live in bubble land out west and east. Here in Texas appreciation stays slow and steady. Plus we don't have a state income tax. Cali is nice but the pay is not that great for the cost of living.
Are you bending reality on purpose or are you really that dense? A guy buys a house 20 years ago...it's paid off. Now all he does is rent it out because he owns it clear and just likes to make money...half of the home rentals in Southern California are probably owned by people who have a basket of real estate and someone else managing it.
Yes it is paid off, but tell me what taxes and insurance run on a 600k house out in SD ? They run about 3 % for both in TX and I know that is lower than SD. So he is renting it for 1700 a month and his cost NOT including vacancy, paying a leasing agent and paying for repairs are costing him at LEAST 1500 a month. Apreciation is one arguement, but his money is locked up in that house and he could be down 20% at any given time when the bubble pops out there ?
http://www.assessor.saccounty.net/general-information/real-property.html There are perks to renting like being able to depreciate the property and expense fixups. Taxes might not be a huge issue. Most property managers take 10%(for a really good one).