Totoro: I already owned a rental property a few years back, but I found out that's not my kind of investment. I didn't like the hassle with tenants (even though I still rent out my basement), double mortgage, maintenance, etc. I prefer stocks, bonds and mutual funds, also since I work as a CFA...
Also, like Stigo points out, the Norwegian tax system disfavors rental properties - and we may very well have a housing bubble over here.
I tried to advice my girlfriend against buying real estate at the moment, but she already feels she's lost a few good years in the market, and like I said want the leveraged returns...
Tannybrown: Did you mean that for every $ she pays me, I'd use those to invest in mutual funds?
That could of course, but what about leveraged returns. She could just buy a bond-fund or something similar, I guess.
I think one of her most important reasons for wanting to buy real estate, is the psychological feeling of owning something "rock solid" , which you don't really get with paper assests like mutual funds..