Q: My wife and I are considering buying a one-bedroom condominium as an investment. We've talked to four friends. Two of them think it's a bad idea. Two of them think it's a good idea. We would like your opinion.
A: Prudent investment in income-producing real estate consistently has been about the best investment for many people for the last 35 years. There have been some ups and downs, of course. Fortunately, the "downs" have not lasted long and the upward trend in value has returned.
Note I said "prudent investment." This means the property's location should be good, the property should be structurally sound and well-designed with adequate amenities, there should be a rental demand for the property you buy, there should be no rent control and -- today, certainly -- utilities should be separately metered so that the tenant pays them. In addition, compare selling price to see that the condominium you buy is a good value and reasonable priced.
Even then, don't expect your rental income to yield a completely adequate return on your investment. That should come in the increasing value of your unit. When and if you sell it, your "overall return" on your investment should be (at least, has been in most cases) as great as or greater than you can expect in most other types of relatively non-speculative investment.