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Yes, I would agree that this is the issue. Those who don't have enough reserves to invest in real estate without doing something like withdrawing from or taking a loan from a retirement account are taking a very large risk with their retirement.

There's actually another risk that some purchasers don't see. (Please note: I said some, not all). A lot of condo groups and HOAs put restrictions on rentals. Condos in particular might not allow purchase of property for rentals. There are rules set up for this. The owner has to live in the house for a certain period of time before a rental is allowed. Banks and other investment corporations know this and have their lawyers check beforehand so they don't make that mistake.

Individuals (as we learned during the Great Housing Crash), don't always understand the rules and don't necessarily have a lawyer to go over the rules with them. There have been some ugly stories about what happens when someone buys with intent to rent and doesn't mention this to their agent.

As I tried to say, real estate investment can be profitable if you know what you're doing and have the funds to cover the costs. Particularly those people who are able to do a lot of maintenance themselves can make a profit. It also helps to know the location and area, rather than buying from a distance. Back during the crash I remember linking a story about how people from Virginia and other regions were investing in the Boston housing market, and unwittingly making bad purchases on someone else's say so.

So yes. Good for people who know what they're doing. Not so good for people who simply don't want to put their money into standard investments and who have been to a class given by Richard Kiyosaki.

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