Do any of you own income properties? Would you recommend it? Caveats?

I was speaking with my parents tonight about ways they could invest their money. My mother is amazing, but has some nutty ideas about the stock market and always seems to be in constant fear of financial Armageddon. I don’t deny this possibility, and can appreciate that as they’re in their late 50’s and mid 60’s they need to be conservative in their investment strategies.

This led me to thinking that perhaps taking advantage of the lousy housing market by purchasing an investment property or two might be a reasonable course of action for them. Their house is paid off, and I was thinking they might be able to get a couple of modest properties in good condition in good school districts.

They could take out 10 or 15 year mortgages at great interest rates (they have amazing credit) with maybe 50% down or so, and use the rental income to cover the mortgages and maintenance/other expenses. By the time they’re ready to start drawing on their retirement, the mortgages on those properties should be mostly/completely paid off and they can use the monthly income to supplement the income from the rest of their portfolio. This would allow them more flexibility in not having to sell some of their other securities if things take a hit down the road, and allow them to wait for things to recover a bit.

Is this a crazy strategy? Do any of you have any experience with this type of investing? are there any books or other resources you’ve read on the subject that you’ve found particularly helpful?