An appreciating asset bought with leverage provides one of the most readily available means to go from "I am in the bottom quartile of net worth" to "I have at/above the national median net worth".

I did buy basically the most expensive house we could afford (slightly less than the most expensive we could qualify for) in 2007 in a desirable city. That decision (vs continuing to rent or buying a $500K condo in that city) has likely added more to our net worth than our working for the last decade did. We bought it as a place to live and raise a family, but the financial upside (as yet still an unrealized gain) is large enough to not ignore.

Well, it should be noted that appreciation only matters in this equation in the case of a sale. The idea of moving in order to liquidate assets isn’t something palatable to me, so I treated my home purchase like any other product: I bought the cheapest one that meets my requirements.

As long as the numbers work out, though, It does seem entirely reasonable to take a loan to buy a house with the intent of renting it out for income. If the rent you receive can cover the maintenance and loan interest, you can sell it on again any time you need your capital back and bank the appreciation (or lose the depreciation, prices move both ways).