I don’t have a lot of experience with real estate, but it seems to be the limit of what I would do as an investor. Let me qualify that, a typical person who doesn’t do investments full time or someone who has to work a job, etc. For those who are sophisticated investors, there are plenty of risky things they can do. 

Many people start off by buying a place to live. As time passes, and (hopefully) rents and a person’s wages increase, they buy a new home and rent the old one. A new craze (well let’s say more people are talking about it), is to buy a place for living but also rent out other rooms in the hours. Called house hacking.

If you end up owning property that you do not live in, it creates issues around management. If your property is close to you, you may be able to manage it yourself. But if it is far away (let’s say you moved for a job but wanted to keep your home), you will have to rely on a management company or friends/relatives. This could be a giant headache.

I like the house hiking idea. If you have to replace the roof, you were going to have to do it anyway, with or without tenants. But if it is a pure investment property it is hitting your cash flow. And the whole reason you own an investment property is to have cash flow. I know some will say appreciation is also a factor. And it is. Especially, if you use leverage. If you have only 10k invested and the house appreciates 10k a year, that’s 100% return on your investment. But to get that gain out, you either have to sell it (incur commissions and taxes on your gains) or borrow it out (which depends on your income to support the higher debt). Nothing is easy, don’t buy the what the snake oil salesman are telling you. 

AND, real estate prices do not always go up. We have had moments where real estate prices have crashed. If you can survive the crash, then fine. But oftentimes, the crash is associated with a weaker economy. A weaker economy means fewer jobs. If you lose your job, it is hard to pay the mortgage.