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residential real estate as investment

There seems to be a high penalty for owning residential real estate. With no mortgages, my home expenses (property tax and insurance) run a reasonable $8500 today (for 2 modest homes). By the time I am 95, that figure grows to over $140,000/year. This does not seem reasonable. It is by far the highest expense in my spending report in the later years. Is there a way to rachet this climb in property tax and insurance to a more reasonable growth rate ? I know, next question is, what is reasonable ?
With this feedback, I would assume no one would own vacation property, unless they rent it out. Then they would have to recieve enough rent to cover future propterty tax and insurance.
Seems like owning residential property is a horrible investment.
What am I missing here ?


realized that the real estate expenses are indexed to the home value appreciation (set at 6%). That is why the expenses for residential property in my case were so high.


Yeah, if you live in a state with a real estate tax cap or don't believe that property taxes will track appreciation in significant ways, enter 0 for property taxes and use deductible special expenditures for your property tax burden, grown appropriately.

As for residential real estate being a good investment, that depends. In most states, renters have more rights than the property owners so it's not hard to wind up in situations where you have substantial expenses that you can't recover as a consequence of lousy tenants. That is one of the reasons being a slum lord works, they actually are managing their properties in a reasonable way from one perspective. Commercial real estate is much more manageable, no judge or jury ever feels sorry for a small business (although they probably should).


Dick Munroe