Appreciation or cash flow: if you could only build on one, which would it be?
Garrett BrownPro Member
Rental Property Investor · Houston, TX · Member since 2024 · 504 posts · 550 votesAppreciation or cash flow: if you could only build on one, which would it be?
Most Popular Reply
Real Estate Broker · Nashville, TN · Member since 2022 · 163 posts · 87 votes
3moB all day.
I manage about two dozen rental doors here in Nashville and I can tell you exactly what happens when someone buys for appreciation only. They call me panicking when rents dip $50 and they can't cover their mortgage. That owner is the hardest client to manage because they never planned for the property to actually perform on a monthly basis.
Cash flow keeps you in the game long enough to benefit from appreciation anyway. I have owners who bought in Antioch and Hermitage five or six years ago when everyone called those areas too rough. They bought for the numbers. $1,200 rent on a $180K house. Now those same houses are worth north of $300K and rents are pushing $1,600. They got both sides of the coin because they could afford to hold.
The appreciation chasers who bought in the Gulch or 12 South for $600K hoping to Airbnb their way to profit? Half of them sold at a loss when Nashville tightened STR permits. They couldn't hold because the monthly math never worked.
Cash flow is your oxygen supply. Appreciation is the view from the summit. You don't get the view if you run out of air on the way up.
Real number from my portfolio: one of my owners nets about $400/month after all expenses on a $195K purchase in Madison, TN. Boring? Sure. But she has held through two rate hikes and a tenant turnover without ever asking me to discount rent or sell. That is the power of buying the math first.
26 Replies
- Real Estate Broker · Nashville, TN · Member since 2022 · 163 posts · 87 votes3mo
B all day.
I manage about two dozen rental doors here in Nashville and I can tell you exactly what happens when someone buys for appreciation only. They call me panicking when rents dip $50 and they can't cover their mortgage. That owner is the hardest client to manage because they never planned for the property to actually perform on a monthly basis.
Cash flow keeps you in the game long enough to benefit from appreciation anyway. I have owners who bought in Antioch and Hermitage five or six years ago when everyone called those areas too rough. They bought for the numbers. $1,200 rent on a $180K house. Now those same houses are worth north of $300K and rents are pushing $1,600. They got both sides of the coin because they could afford to hold.
The appreciation chasers who bought in the Gulch or 12 South for $600K hoping to Airbnb their way to profit? Half of them sold at a loss when Nashville tightened STR permits. They couldn't hold because the monthly math never worked.
Cash flow is your oxygen supply. Appreciation is the view from the summit. You don't get the view if you run out of air on the way up.
Real number from my portfolio: one of my owners nets about $400/month after all expenses on a $195K purchase in Madison, TN. Boring? Sure. But she has held through two rate hikes and a tenant turnover without ever asking me to discount rent or sell. That is the power of buying the math first.
- Member since 2026 · 64 posts · 28 votes3mo
Appreciation — and not as a hedge. The non-obvious part: it's the only one of the two that's actually a location question. Cash flow you can manufacture almost anywhere — buy cheap enough and the spreadsheet works on day one. Whether it survives depends on the demand base under the property, and that base is exactly what drives appreciation. So they aren't a fork: durable cash flow is appreciation's byproduct, while a high yield on a shrinking denominator is the trap that looks like cash flow right up until it isn't. Which is why the $1M-vs-$200K split is the wrong cut. That's not a list of cities, it's a dispersion — and it runs inside metros, not just between them. The same metro holds tracts on opposite trajectories. The skill isn't choosing appreciation or cash flow; it's locating the tract where the demand base is bending up and letting both fall out of that read. Build on the thing you can locate. The rest is downstream.
- 3moDenise SuppleeBusiness MemberRealtor · Willow Grove, PA · Member since 2017 · 969 posts · 638 votes
If I had to pick one, I’d choose B: the affordable cash-flow market.
Appreciation is wonderful when it happens, but cash flow helps you hold the property through the ups and downs. Over the years, I’ve found that the ability to sleep at night matters more than people think. A property that pays for itself gives you options. A property that depends on future appreciation can work, but it also requires a lot more patience and risk tolerance.
Spark Rental Co-Investing Club577 Reviews - 3moEric FernwoodBusiness MemberRealtor · Las Vegas, NV · Member since 2014 · 991 posts · 1k+ votes
Hello Garrett,
Each investor is different. There is no one answer that fits all. So I’m afraid that I’ll have to say what you should buy depends on your goal (and your finances).
If you want the most cash flow in year one, buying cheaper properties with higher starting cash flow makes sense. However, low prices are a red flag for future appreciation and rent growth. Low prices are often the result of weak demand over many years.
If your goal is appreciation and a monthly income that lasts 20 to 40 years and grows faster than inflation, the city matters far more than the property. Rent growth and appreciation are not a property feature. They are a city feature.
Picture a city as a harbor, and rents and prices as boats floating in it. Population growth is the tide. When more people move in, housing demand rises, and rents and prices climb because buyers and renters outnumber available homes. When population growth slows or drops, rent growth often stalls because there are more homes than people who want them. Even the best property can only do as well as the city around it.
People move to cities for good-paying work. Cities that keep attracting new employers gain new jobs, draw new residents, raise housing demand, and push rents and property prices up.
This is why I treat the city as the investment. The property is just a vehicle for attracting a tenant segment that stays many years and pays the rent on time.
So if your goal is appreciation and rent (income) growth, pick a city with significant and sustained population growth. Then identify a tenant segment that stays for years, and find out what and where they currently rent, and buy similar properties.
FERNWOOD Team, KW VIP Realty520 Reviews - Hinton, WV · Member since 2026 · 1 post · 0 votes3mo
Hey there can you chat me. I have something to discuss with you.
- MD/DC · Member since 2024 · 1k+ posts · 1k+ votes3mo
I skew toward appreciation anyway so if I had to choose it would be appreciation 100%. In my experience neighborhoods that are appreciating are solid or improving which can result in thousands of dollars in the long run not just hundreds of dollars per month. The tax benefits are still in play and higher end neighborhoods are generally easier to manage from a tenant standpoint. They are less likely to default or leave the property trashed and good neighborhoods should be easy to resell when I'm ready to move on.
- Investor · Get yourself trained before doing something inadvisable. · Member since 2024 · 3k+ posts · 1k+ votes3moCash flow always. If you are losing money every month hoping for appreciation, there is no guarantee that appreciation won't reverse and if you can't afford the project you lose it anyway to foreclosure. (there were a lot of people that learned that in the last down cycle.) Always invest like it's a job. Because it is.
Quote from @Garrett Brown:
Quick one for the forum brain trust.
Zillow just reported that a record 242 cities now have starter homes going for a million bucks or more. Meanwhile, the typical starter home nationwide is still under $200K. The gap between expensive markets that appreciate and cheap markets that cash-flow has never been wider, making right now the perfect time to relitigate the oldest argument in real estate.
So here it is. If you were buying rental number one today and could only optimize for one thing, which would you pick:
A) The pricey appreciation market. Thin or negative cash flow now, but you're betting on long-term equity and rent growth.
B) The affordable cash-flow market. Money in your pocket every month, slower appreciation, and easier to sleep at night.
No "it depends" allowed. Pick a side and tell me why. I want the reasoning, not just the vote, and bonus points for a real number from your own portfolio.
I'm asking because I'm putting the best answers in Thursday's edition of the BiggerPockets Investor Brief, in front of the whole list. If you've got a take that'll make people rethink their strategy, this is your shot at the spotlight.
Garrett
- 3moDan H.Pro MemberInvestor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
Appreciation every time. Why?
1) Nothing correlates better to long term cash flow assuming no value extract than appreciation. To word it differently nothing correlates better to rent growth than appreciation and on a long hold nothing dictates cash flow more than rent growth.
2) leveraged returns from appreciation whoops cash flow in both dollars and returns. My worse appreciation on a property is $2600/month on a $167k purchase that I used leverage to buy. I have multiple properties that have appreciated over $10k/month including one acquired with leverage for $160k plus closing costs. There is no way cash flow can produce over $120k/year on a $160k investment.
3)cash flow is taxed annually. No other source of RE return is taxed annually. Some forms of RE return can avoid ever being taxed.
4) I do not need the cash flow from our future purchases. I am retired due to my RE returns (I have made significant wealth via 3 diverse streams but RE is the largest and is currently adding the most to my return).
If you require cash flow to pay the bills then you cannot shun initial cash flow for the long term return. But if you have no need for the cash flow, strive for optimal return and the optimal return comes from the higher appreciating property if leverage is heavily utilized.
Good luck
- Investor · Gulf Coast · Member since 2026 · 37 posts · 13 votes3mo
Appreciation is where the money is. But it's got to carry itself. Analyze the market and the neighborhood you're in and stay in an upper middle class neighborhood so you can snag a upper middle class renter with an upper middle class job. I'd stick to single mom's with at least a child hopefully nearing or in their teenage years. Lower markets will mean lower rents and lower socioeconomic renters.
- Investor · Gulf Coast · Member since 2026 · 37 posts · 13 votes3mo
which will mean more vacancies or turnover.
- Rental Property Investor · MN · Member since 2026 · 5 posts · 7 votes3mo
B, for me personally.
Appreciation is a bet you pay for with money you don't have yet. Cash flow is a paycheck you can use this month. When you own one property, the real question isn't which strategy wins on a spreadsheet ten years out. Which one keeps you in the game long enough to buy number two?
I'll give you my number even if I can't give you a clean spreadsheet. My husband and I started in 1998, buying eight condos in one modest North Miami complex over about three years. This was back when records meant a paper file and a checkbook, so I won't pretend to quote you exact closing figures from memory. But I can tell you the part that mattered. They were cheap, and each one put money in our pockets every month. That monthly cash flow is the only reason we could buy the next one, and the next. We weren't waiting for appreciation to prove us right. The cash flow made us right while we waited.
A negative cash-flow property in an appreciating market is a second job that bills you every time the furnace dies or a tenant moves out. Most people who quit after their first deal don't quit because the house failed to appreciate. They quit because they got tired of feeding it.
None of this means appreciation is fake. Plenty of people have gotten rich betting on it. But they could afford to wait. On your first deal, you usually can't, and the market does not care how patient you planned to be.
- Cincinnati, OH · Member since 2020 · 4k+ posts · 3k+ votes3mo
I get what you are going for, and to answer directly: Appreciation all day. But there are so many caveats.
Is the "appreciation play" covering itself each month or am I chipping into the deal every month?
The cash flow play: is this driven because I found a great deal that I can actually cash flow or is it because I am buying in a warzone area (the more common scenario) where my spreadsheet shows good cash flow, but in reality, turn over costs, longer vacancy to find qualified tenants, higher repair bills as a percentage of rent, are actually eating my returns.Dan H hits the nail on the head. Your "high appreciation" locations are also the ones with the strongest rent growth, and typically the best tenant bases. Your high cash flow plays are often major risks being priced in. So, as long as you can afford to hold the appreciation play long enough to get the cash flow, you will be in a better financial position from both cash flow AND appreciation in the long term by buying the "appreciation play"
- 3moPatrick HaralsonPro MemberMember since 2019 · 1 post · 1 vote
I'm an investor and property manager in Memphis, TN - so I obviously have to be a cash flow guy, but let me pretend like my hand is not forced for a moment and make what I find to be the most compelling case for cash flow markets over appreciation markets.
Here's my thesis: Cash flow markets have a lower ceiling than appreciation markets, but a higher floor, and this is better for a first time buyer.
Getting into a market that is appreciation-leaning is more capital-intensive to begin with, so by necessity, your exposure is higher at entry than if you were getting into a cash flow market. Consider my home state. If you wanted to buy a 1,000 sq. ft. modest 3/2 in the Nashville area, you would have to pay ~$375k and it would rent for around $2k/month. Even with the best mortgage terms currently available, there's no way you're cash flow positive on that deal. That same house in Memphis will cost you closer to $125k and rent for $1.4k/month (I just finished one of these, so you can consider this "real numbers from my portfolio"). Assuming equal leverage across the board, I can buy 3x Memphis (cash flow) houses for the price of 1x Nashville (appreciation) house, be cash flow positive, and have some asset diversification to help me de-risk a bit. If my 1x Nashville house goes vacant, I have no income. If 1 of my 3 Memphis houses go vacant, I have the other 2 protecting it. The name of the game, especially early on, is to minimize exposure - and I think you can do this much more easily via cash flow.
On the ceiling side of the argument - if there is a nationwide appreciation event (such as Covid was), I get to participate in the appreciation game just like the appreciation-oriented investor - albeit to a much lesser degree; so, there is still a high ceiling on my investment, but with a much more secure floor.
Now, in reality, both appreciation-based investing & cash flow-based investing contain speculative components. The appreciation guy is speculating that these values will grow over time, while the cash flow guy is speculating that these rents will grow over time. The key difference though is that the appreciation guy has to be right to win... the cash flow guy can be wrong & still win. I like that ALOT for someone who is just learning the ropes.
- 3moJordan RayBusiness MemberReal Estate Agent · Memphis, TN · Member since 2023 · 623 posts · 321 votes
Quote from @Garrett Brown:
Quick one for the forum brain trust.
Zillow just reported that a record 242 cities now have starter homes going for a million bucks or more. Meanwhile, the typical starter home nationwide is still under $200K. The gap between expensive markets that appreciate and cheap markets that cash-flow has never been wider, making right now the perfect time to relitigate the oldest argument in real estate.
So here it is. If you were buying rental number one today and could only optimize for one thing, which would you pick:
A) The pricey appreciation market. Thin or negative cash flow now, but you're betting on long-term equity and rent growth.
B) The affordable cash-flow market. Money in your pocket every month, slower appreciation, and easier to sleep at night.
No "it depends" allowed. Pick a side and tell me why. I want the reasoning, not just the vote, and bonus points for a real number from your own portfolio.
I'm asking because I'm putting the best answers in Thursday's edition of the BiggerPockets Investor Brief, in front of the whole list. If you've got a take that'll make people rethink their strategy, this is your shot at the spotlight.
Garrett
I'm taking B every single time. If I'm buying rental number one, I want cash flow from day one. Appreciation is great, but appreciation doesn't pay the mortgage, cover repairs, or help me buy the next property. Too many investors convince themselves they're investing when they're really speculating on future appreciation. My view has always been that if a property doesn't cash flow, you're not building a business—you're buying a liability and hoping the market saves you.
For the bonus points, my own portfolio of 8 rental properties (and growing fast by running the BRRRR model) currently cash flows about $2,400 per month, and those properties are appreciating too. The difference is that appreciation was never the reason I bought them. The goal was to create income from day one and let appreciation become the bonus. That's why I continue to like markets such as Memphis, where it's still possible to find properties that hit the 1% rule and produce real cash flow. If I get monthly income, loan paydown, tax benefits, and appreciation, I've got multiple wealth-building engines working for me instead of betting everything on one outcome.
Cash flow also gives you options. It helps you survive downturns, self-fund repairs, qualify for additional financing, and continue scaling without constantly feeding your portfolio from your day job. Appreciation is wonderful when it happens, but I don't want my entire investment thesis resting on something I can't control. For rental number one, I'm choosing the asset that pays me today and letting appreciation take care of itself over the next decade.
Jordan Ray - eXp Realty5110 Reviews- MD/DC · Member since 2024 · 1k+ posts · 1k+ votes3mo
Quote from @Jordan Ray:
Quote from @Garrett Brown:
Quick one for the forum brain trust.
Zillow just reported that a record 242 cities now have starter homes going for a million bucks or more. Meanwhile, the typical starter home nationwide is still under $200K. The gap between expensive markets that appreciate and cheap markets that cash-flow has never been wider, making right now the perfect time to relitigate the oldest argument in real estate.
So here it is. If you were buying rental number one today and could only optimize for one thing, which would you pick:
A) The pricey appreciation market. Thin or negative cash flow now, but you're betting on long-term equity and rent growth.
B) The affordable cash-flow market. Money in your pocket every month, slower appreciation, and easier to sleep at night.
No "it depends" allowed. Pick a side and tell me why. I want the reasoning, not just the vote, and bonus points for a real number from your own portfolio.
I'm asking because I'm putting the best answers in Thursday's edition of the BiggerPockets Investor Brief, in front of the whole list. If you've got a take that'll make people rethink their strategy, this is your shot at the spotlight.
Garrett
I'm taking B every single time. If I'm buying rental number one, I want cash flow from day one. Appreciation is great, but appreciation doesn't pay the mortgage, cover repairs, or help me buy the next property. Too many investors convince themselves they're investing when they're really speculating on future appreciation. My view has always been that if a property doesn't cash flow, you're not building a business—you're buying a liability and hoping the market saves you.
For the bonus points, my own portfolio of 8 rental properties (and growing fast by running the BRRRR model) currently cash flows about $2,400 per month, and those properties are appreciating too. The difference is that appreciation was never the reason I bought them. The goal was to create income from day one and let appreciation become the bonus. That's why I continue to like markets such as Memphis, where it's still possible to find properties that hit the 1% rule and produce real cash flow. If I get monthly income, loan paydown, tax benefits, and appreciation, I've got multiple wealth-building engines working for me instead of betting everything on one outcome.
Cash flow also gives you options. It helps you survive downturns, self-fund repairs, qualify for additional financing, and continue scaling without constantly feeding your portfolio from your day job. Appreciation is wonderful when it happens, but I don't want my entire investment thesis resting on something I can't control. For rental number one, I'm choosing the asset that pays me today and letting appreciation take care of itself over the next decade.
8 properties are averaging $300 a month each, so $28,800 year? FWIW even going back 30 years when $300 was probably equivalent to $600 today I was able to cash flow at least $300 per month in class A neighborhoods that were significantly increasing in value also.
- 3moJordan RayBusiness MemberReal Estate Agent · Memphis, TN · Member since 2023 · 623 posts · 321 votes
Quote from @Jules Aton:
Quote from @Jordan Ray:
Quote from @Garrett Brown:
Quick one for the forum brain trust.
Zillow just reported that a record 242 cities now have starter homes going for a million bucks or more. Meanwhile, the typical starter home nationwide is still under $200K. The gap between expensive markets that appreciate and cheap markets that cash-flow has never been wider, making right now the perfect time to relitigate the oldest argument in real estate.
So here it is. If you were buying rental number one today and could only optimize for one thing, which would you pick:
A) The pricey appreciation market. Thin or negative cash flow now, but you're betting on long-term equity and rent growth.
B) The affordable cash-flow market. Money in your pocket every month, slower appreciation, and easier to sleep at night.
No "it depends" allowed. Pick a side and tell me why. I want the reasoning, not just the vote, and bonus points for a real number from your own portfolio.
I'm asking because I'm putting the best answers in Thursday's edition of the BiggerPockets Investor Brief, in front of the whole list. If you've got a take that'll make people rethink their strategy, this is your shot at the spotlight.
Garrett
I'm taking B every single time. If I'm buying rental number one, I want cash flow from day one. Appreciation is great, but appreciation doesn't pay the mortgage, cover repairs, or help me buy the next property. Too many investors convince themselves they're investing when they're really speculating on future appreciation. My view has always been that if a property doesn't cash flow, you're not building a business—you're buying a liability and hoping the market saves you.
For the bonus points, my own portfolio of 8 rental properties (and growing fast by running the BRRRR model) currently cash flows about $2,400 per month, and those properties are appreciating too. The difference is that appreciation was never the reason I bought them. The goal was to create income from day one and let appreciation become the bonus. That's why I continue to like markets such as Memphis, where it's still possible to find properties that hit the 1% rule and produce real cash flow. If I get monthly income, loan paydown, tax benefits, and appreciation, I've got multiple wealth-building engines working for me instead of betting everything on one outcome.
Cash flow also gives you options. It helps you survive downturns, self-fund repairs, qualify for additional financing, and continue scaling without constantly feeding your portfolio from your day job. Appreciation is wonderful when it happens, but I don't want my entire investment thesis resting on something I can't control. For rental number one, I'm choosing the asset that pays me today and letting appreciation take care of itself over the next decade.
8 properties are averaging $300 a month each, so $28,800 year? FWIW even going back 30 years when $300 was probably equivalent to $600 today I was able to cash flow at least $300 per month in class A neighborhoods that were significantly increasing in value also.
$300/month is not bad. This is after a very nice rehab with virtually little to no maintenance or capex for several years. If you are worried about $300/month then you need to invest in something with more short term returns, not real estate. My properties will eventually cashflow even more as I hold them by rents increasing, eventually will refinance will a lower interest rate, and of course my net worth is building. Trust me, I would love $600/month but its just not realistic in my market, which I am fine with.
Jordan Ray - eXp Realty5110 Reviews - 3moDan H.Pro MemberInvestor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
Quote from @Jordan Ray:
Quote from @Jules Aton:
Quote from @Jordan Ray:
Quote from @Garrett Brown:
Quick one for the forum brain trust.
Zillow just reported that a record 242 cities now have starter homes going for a million bucks or more. Meanwhile, the typical starter home nationwide is still under $200K. The gap between expensive markets that appreciate and cheap markets that cash-flow has never been wider, making right now the perfect time to relitigate the oldest argument in real estate.
So here it is. If you were buying rental number one today and could only optimize for one thing, which would you pick:
A) The pricey appreciation market. Thin or negative cash flow now, but you're betting on long-term equity and rent growth.
B) The affordable cash-flow market. Money in your pocket every month, slower appreciation, and easier to sleep at night.
No "it depends" allowed. Pick a side and tell me why. I want the reasoning, not just the vote, and bonus points for a real number from your own portfolio.
I'm asking because I'm putting the best answers in Thursday's edition of the BiggerPockets Investor Brief, in front of the whole list. If you've got a take that'll make people rethink their strategy, this is your shot at the spotlight.
Garrett
I'm taking B every single time. If I'm buying rental number one, I want cash flow from day one. Appreciation is great, but appreciation doesn't pay the mortgage, cover repairs, or help me buy the next property. Too many investors convince themselves they're investing when they're really speculating on future appreciation. My view has always been that if a property doesn't cash flow, you're not building a business—you're buying a liability and hoping the market saves you.
For the bonus points, my own portfolio of 8 rental properties (and growing fast by running the BRRRR model) currently cash flows about $2,400 per month, and those properties are appreciating too. The difference is that appreciation was never the reason I bought them. The goal was to create income from day one and let appreciation become the bonus. That's why I continue to like markets such as Memphis, where it's still possible to find properties that hit the 1% rule and produce real cash flow. If I get monthly income, loan paydown, tax benefits, and appreciation, I've got multiple wealth-building engines working for me instead of betting everything on one outcome.
Cash flow also gives you options. It helps you survive downturns, self-fund repairs, qualify for additional financing, and continue scaling without constantly feeding your portfolio from your day job. Appreciation is wonderful when it happens, but I don't want my entire investment thesis resting on something I can't control. For rental number one, I'm choosing the asset that pays me today and letting appreciation take care of itself over the next decade.
8 properties are averaging $300 a month each, so $28,800 year? FWIW even going back 30 years when $300 was probably equivalent to $600 today I was able to cash flow at least $300 per month in class A neighborhoods that were significantly increasing in value also.
$300/month is not bad. This is after a very nice rehab with virtually little to no maintenance or capex for several years. If you are worried about $300/month then you need to invest in something with more short term returns, not real estate. My properties will eventually cashflow even more as I hold them by rents increasing, eventually will refinance will a lower interest rate, and of course my net worth is building. Trust me, I would love $600/month but its just not realistic in my market, which I am fine with.
I will start by saying it is a tough RE market and if you are getting $300/month cash flow when properly allocating for all expenses (including PM) and vacancy that is good cash flow for the price point of Memphis.
However, without appreciation that is not enough to justify the effort and risk of residential RE ownership. You require leveraged appreciation to make residential RE worth the effort and risk.
My worst appreciating property has appreciated $2600/month. One unit that I purchased for $167k using leverage. My investment fully recovered in just over a year.
What do you think the rent has grown by with that level of appreciation? My rent has increased nearly $3k/month. This worse of my portfolio property had some small initial cash flow at purchase but let’s say it was just break even, what do you think it would cash flow if the rent has increased $3k/month? The reality is I extracted value out and the cash flow is modest (modest cash flow is a theme of my properties because I emphasize total return which is achieved at high leverage) but it would be outstanding if I had not extracted value out.
Now look at one of my better appreciation properties. Purchased 4.5 years ago and has appreciated ~$20k/month. Rent went from $6k (that was very negative with my underwriting) to $20k/month (PITI is just below $9.5k/month) and having modest positive cash flow (on top of the $20k/month of appreciation), my underwriting shows $1250 positive cash flow (modest, but poor for the level of equity).
These numbers make a life style impact and justify the effort and risk of RE. Investors require leveraged appreciation to achieve life changing returns. note i am not stating you are not there or on your way to there when you include your appreciation (have you calculated your monthly appreciation on the 8 properties, you may be pleasantly surprised at the numbers).
The sum total of my modest cash flow ends up being significant (I am retired doing what I want - yesterday it was a nascar race), but the appreciation has made me wealthy.
Something to ponder.
Good luck
- 3moJordan RayBusiness MemberReal Estate Agent · Memphis, TN · Member since 2023 · 623 posts · 321 votes
Quote from @Dan H.:
Quote from @Jordan Ray:
Quote from @Jules Aton:
Quote from @Jordan Ray:
Quote from @Garrett Brown:
Quick one for the forum brain trust.
Zillow just reported that a record 242 cities now have starter homes going for a million bucks or more. Meanwhile, the typical starter home nationwide is still under $200K. The gap between expensive markets that appreciate and cheap markets that cash-flow has never been wider, making right now the perfect time to relitigate the oldest argument in real estate.
So here it is. If you were buying rental number one today and could only optimize for one thing, which would you pick:
A) The pricey appreciation market. Thin or negative cash flow now, but you're betting on long-term equity and rent growth.
B) The affordable cash-flow market. Money in your pocket every month, slower appreciation, and easier to sleep at night.
No "it depends" allowed. Pick a side and tell me why. I want the reasoning, not just the vote, and bonus points for a real number from your own portfolio.
I'm asking because I'm putting the best answers in Thursday's edition of the BiggerPockets Investor Brief, in front of the whole list. If you've got a take that'll make people rethink their strategy, this is your shot at the spotlight.
Garrett
I'm taking B every single time. If I'm buying rental number one, I want cash flow from day one. Appreciation is great, but appreciation doesn't pay the mortgage, cover repairs, or help me buy the next property. Too many investors convince themselves they're investing when they're really speculating on future appreciation. My view has always been that if a property doesn't cash flow, you're not building a business—you're buying a liability and hoping the market saves you.
For the bonus points, my own portfolio of 8 rental properties (and growing fast by running the BRRRR model) currently cash flows about $2,400 per month, and those properties are appreciating too. The difference is that appreciation was never the reason I bought them. The goal was to create income from day one and let appreciation become the bonus. That's why I continue to like markets such as Memphis, where it's still possible to find properties that hit the 1% rule and produce real cash flow. If I get monthly income, loan paydown, tax benefits, and appreciation, I've got multiple wealth-building engines working for me instead of betting everything on one outcome.
Cash flow also gives you options. It helps you survive downturns, self-fund repairs, qualify for additional financing, and continue scaling without constantly feeding your portfolio from your day job. Appreciation is wonderful when it happens, but I don't want my entire investment thesis resting on something I can't control. For rental number one, I'm choosing the asset that pays me today and letting appreciation take care of itself over the next decade.
8 properties are averaging $300 a month each, so $28,800 year? FWIW even going back 30 years when $300 was probably equivalent to $600 today I was able to cash flow at least $300 per month in class A neighborhoods that were significantly increasing in value also.
$300/month is not bad. This is after a very nice rehab with virtually little to no maintenance or capex for several years. If you are worried about $300/month then you need to invest in something with more short term returns, not real estate. My properties will eventually cashflow even more as I hold them by rents increasing, eventually will refinance will a lower interest rate, and of course my net worth is building. Trust me, I would love $600/month but its just not realistic in my market, which I am fine with.
I will start by saying it is a tough RE market and if you are getting $300/month cash flow when properly allocating for all expenses (including PM) and vacancy that is good cash flow for the price point of Memphis.
However, without appreciation that is not enough to justify the effort and risk of residential RE ownership. You require leveraged appreciation to make residential RE worth the effort and risk.
My worst appreciating property has appreciated $2600/month. One unit that I purchased for $167k using leverage. My investment fully recovered in just over a year.
What do you think the rent has grown by with that level of appreciation? My rent has increased nearly $3k/month. This worse of my portfolio property had some small initial cash flow at purchase but let’s say it was just break even, what do you think it would cash flow if the rent has increased $3k/month? The reality is I extracted value out and the cash flow is modest (modest cash flow is a theme of my properties because I emphasize total return which is achieved at high leverage) but it would be outstanding if I had not extracted value out.
Now look at one of my better appreciation properties. Purchased 4.5 years ago and has appreciated ~$20k/month. Rent went from $6k (that was very negative with my underwriting) to $20k/month (PITI is just below $9.5k/month) and having modest positive cash flow (on top of the $20k/month of appreciation), my underwriting shows $1250 positive cash flow (modest, but poor for the level of equity).
These numbers make a life style impact and justify the effort and risk of RE. Investors require leveraged appreciation to achieve life changing returns. note i am not stating you are not there or on your way to there when you include your appreciation (have you calculated your monthly appreciation on the 8 properties, you may be pleasantly surprised at the numbers).
The sum total of my modest cash flow ends up being significant (I am retired doing what I want - yesterday it was a nascar race), but the appreciation has made me wealthy.
Something to ponder.
Good luck
Hey @Dan H., let me provide more context by saying that I have been buying most of these properties with $10,000-$12,000 out of pocket or less using 100% hard money loans, having them rented and refinanced within 90 days, and then bringing nothing out of pocket when refinancing and sometimes getting cash back. This usually allows a 30% - 40% cash on cash return and then I get to benefit from everything else that comes along with it. I did just looking up my monthly appreciation and it does not like my accounting software for my rentals (REI HUB) has that feature. What are using to calculate that? If I had to make an easy assumption using 3% across 8 properties, my portfolio value currently is $1,487,175 and so I took that and put it into ChatGPT and this is what it told me:
"Using a conservative 3% annual appreciation:
Annual appreciation:
$1,487,175 × 3% = $44,615.25 per year
Monthly appreciation:
$44,615.25 ÷ 12 = $3,717.94 per month
So your portfolio is appreciating at roughly $3,718 per month under a 3% annual appreciation assumption.
To put that in perspective:
- 2% appreciation = about $2,479/month
- 3% appreciation = about $3,718/month
- 4% appreciation = about $4,957/month
- 5% appreciation = about $6,197/month
When you combine that with principal paydown from tenants and your monthly cash flow, you'll get a much more complete picture of your true wealth-building rate. For many Memphis BRRRR portfolios, appreciation is actually the smallest of the three wealth drivers, with loan paydown and forced appreciation often doing more of the heavy lifting."
Hopefully that answers your questions and provides more context and visibility. Also, what markets are you investing in currently?Jordan Ray - eXp Realty5110 Reviews - 3moDan H.Pro MemberInvestor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
Quote from @Jordan Ray:
Quote from @Dan H.:
Quote from @Jordan Ray:
Quote from @Jules Aton:
Quote from @Jordan Ray:
Quote from @Garrett Brown:
Quick one for the forum brain trust.
Zillow just reported that a record 242 cities now have starter homes going for a million bucks or more. Meanwhile, the typical starter home nationwide is still under $200K. The gap between expensive markets that appreciate and cheap markets that cash-flow has never been wider, making right now the perfect time to relitigate the oldest argument in real estate.
So here it is. If you were buying rental number one today and could only optimize for one thing, which would you pick:
A) The pricey appreciation market. Thin or negative cash flow now, but you're betting on long-term equity and rent growth.
B) The affordable cash-flow market. Money in your pocket every month, slower appreciation, and easier to sleep at night.
No "it depends" allowed. Pick a side and tell me why. I want the reasoning, not just the vote, and bonus points for a real number from your own portfolio.
I'm asking because I'm putting the best answers in Thursday's edition of the BiggerPockets Investor Brief, in front of the whole list. If you've got a take that'll make people rethink their strategy, this is your shot at the spotlight.
Garrett
I'm taking B every single time. If I'm buying rental number one, I want cash flow from day one. Appreciation is great, but appreciation doesn't pay the mortgage, cover repairs, or help me buy the next property. Too many investors convince themselves they're investing when they're really speculating on future appreciation. My view has always been that if a property doesn't cash flow, you're not building a business—you're buying a liability and hoping the market saves you.
For the bonus points, my own portfolio of 8 rental properties (and growing fast by running the BRRRR model) currently cash flows about $2,400 per month, and those properties are appreciating too. The difference is that appreciation was never the reason I bought them. The goal was to create income from day one and let appreciation become the bonus. That's why I continue to like markets such as Memphis, where it's still possible to find properties that hit the 1% rule and produce real cash flow. If I get monthly income, loan paydown, tax benefits, and appreciation, I've got multiple wealth-building engines working for me instead of betting everything on one outcome.
Cash flow also gives you options. It helps you survive downturns, self-fund repairs, qualify for additional financing, and continue scaling without constantly feeding your portfolio from your day job. Appreciation is wonderful when it happens, but I don't want my entire investment thesis resting on something I can't control. For rental number one, I'm choosing the asset that pays me today and letting appreciation take care of itself over the next decade.
8 properties are averaging $300 a month each, so $28,800 year? FWIW even going back 30 years when $300 was probably equivalent to $600 today I was able to cash flow at least $300 per month in class A neighborhoods that were significantly increasing in value also.
$300/month is not bad. This is after a very nice rehab with virtually little to no maintenance or capex for several years. If you are worried about $300/month then you need to invest in something with more short term returns, not real estate. My properties will eventually cashflow even more as I hold them by rents increasing, eventually will refinance will a lower interest rate, and of course my net worth is building. Trust me, I would love $600/month but its just not realistic in my market, which I am fine with.
I will start by saying it is a tough RE market and if you are getting $300/month cash flow when properly allocating for all expenses (including PM) and vacancy that is good cash flow for the price point of Memphis.
However, without appreciation that is not enough to justify the effort and risk of residential RE ownership. You require leveraged appreciation to make residential RE worth the effort and risk.
My worst appreciating property has appreciated $2600/month. One unit that I purchased for $167k using leverage. My investment fully recovered in just over a year.
What do you think the rent has grown by with that level of appreciation? My rent has increased nearly $3k/month. This worse of my portfolio property had some small initial cash flow at purchase but let’s say it was just break even, what do you think it would cash flow if the rent has increased $3k/month? The reality is I extracted value out and the cash flow is modest (modest cash flow is a theme of my properties because I emphasize total return which is achieved at high leverage) but it would be outstanding if I had not extracted value out.
Now look at one of my better appreciation properties. Purchased 4.5 years ago and has appreciated ~$20k/month. Rent went from $6k (that was very negative with my underwriting) to $20k/month (PITI is just below $9.5k/month) and having modest positive cash flow (on top of the $20k/month of appreciation), my underwriting shows $1250 positive cash flow (modest, but poor for the level of equity).
These numbers make a life style impact and justify the effort and risk of RE. Investors require leveraged appreciation to achieve life changing returns. note i am not stating you are not there or on your way to there when you include your appreciation (have you calculated your monthly appreciation on the 8 properties, you may be pleasantly surprised at the numbers).
The sum total of my modest cash flow ends up being significant (I am retired doing what I want - yesterday it was a nascar race), but the appreciation has made me wealthy.
Something to ponder.
Good luck
Hey @Dan H., let me provide more context by saying that I have been buying most of these properties with $10,000-$12,000 out of pocket or less using 100% hard money loans, having them rented and refinanced within 90 days, and then bringing nothing out of pocket when refinancing and sometimes getting cash back. This usually allows a 30% - 40% cash on cash return and then I get to benefit from everything else that comes along with it. I did just looking up my monthly appreciation and it does not like my accounting software for my rentals (REI HUB) has that feature. What are using to calculate that? If I had to make an easy assumption using 3% across 8 properties, my portfolio value currently is $1,487,175 and so I took that and put it into ChatGPT and this is what it told me:
"Using a conservative 3% annual appreciation:
Annual appreciation:
$1,487,175 × 3% = $44,615.25 per year
Monthly appreciation:
$44,615.25 ÷ 12 = $3,717.94 per month
So your portfolio is appreciating at roughly $3,718 per month under a 3% annual appreciation assumption.
To put that in perspective:
- 2% appreciation = about $2,479/month
- 3% appreciation = about $3,718/month
- 4% appreciation = about $4,957/month
- 5% appreciation = about $6,197/month
When you combine that with principal paydown from tenants and your monthly cash flow, you'll get a much more complete picture of your true wealth-building rate. For many Memphis BRRRR portfolios, appreciation is actually the smallest of the three wealth drivers, with loan paydown and forced appreciation often doing more of the heavy lifting."
Hopefully that answers your questions and provides more context and visibility. Also, what markets are you investing in currently?I use actual numbers:
(Current value - (purchase price plus immediate rehab,repair costs)) / (months of owning).
Note calculating using actual numbers includes initial value added that is in excess of price of the value add (includes the forced appreciation). If you are refinancing and getting money out, then this will almost definitely increase your appreciation far above 3%/year
Neighborhoodscout shows my market average appreciation is a little below 6% a year for this century on average. Those that purchase below market, add value, understand and use sophisticated value adds, and/or concentrate on areas likely to appreciate faster than market averages can do far better that this average (and I suspect you are doing far better than your area’s average appreciation rate due to the value adds and I suspect purchasing below market price).
Now if I use your 3% number (which you are almost for sure doing far better than) your $3718/month equates to $930/month per property (divide the monthly appreciation by the 8 properties) or over 3x your cash flow from the properties. remember I believe you are doing far better than this and would not be surprised if your number was more than double this.
Seeing that you are typically extracting your full investment in 90 days, you have an incredibly high return. You also have far more return from appreciation than you likely are thinking.
I will show by an example that ignores the initial 90 days you had lower LTV because with time this short trap of capital really is not a significant. Let's say at the refinance you have 1% of value invested (in reality you have $0 invested, but division is complex as you approach 0), then the 3%/year appreciation has an initial return on your investment of 300%/year due to the leverage multiplier. your return from appreciation in reality is many times higher than this 300% in the initial year because you have none of your investment in the property (due to the period you had money invested, it is not an infinite return - that would require never having any money invested).
You are doing awesome. Your return is awesome. Your cash flow is good for your price point and the current market. I applaud you for making your numbers available.
What I hope I showed you and others is the return from appreciation versus cash flow and which is likely to create great wealth. The reality is your wealth position is at least 3x the result of appreciation over cash flow but I suspect the actual appreciation number (including forced appreciation) is significantly more than 3x the return from cash flow. Your wealth has largely been the result of the appreciation and the cash flow is the bonus that can easily be accessed on a monthly basis (but taxed annually).
Now project a decade in the future with a net worth many times higher than your current property value, A monthly non w2 dollar return many times higher than your current cash flow and significantly more than you need to live, and you are in a high tax bracket. You no longer need the cash flow to live a very nice life. Then your RE investing will focus on total return and will concentrate on appreciation (including forced appreciation). You have little need for more cash flow that nearly 40% will go to income taxes (in my state, your state will be less than what I pay).
You are doing great. Your return is great (mostly achieved via leveraged appreciation including the forced appreciation). Your cash flow is good (for current market and price point) and provides immediate motivation.
Best wishes (but I suspect you do not need it - your current path is great)
- 3moJordan RayBusiness MemberReal Estate Agent · Memphis, TN · Member since 2023 · 623 posts · 321 votes
Quote from @Dan H.:
Quote from @Jordan Ray:
Quote from @Dan H.:
Quote from @Jordan Ray:
Quote from @Jules Aton:
Quote from @Jordan Ray:
Quote from @Garrett Brown:
Quick one for the forum brain trust.
Zillow just reported that a record 242 cities now have starter homes going for a million bucks or more. Meanwhile, the typical starter home nationwide is still under $200K. The gap between expensive markets that appreciate and cheap markets that cash-flow has never been wider, making right now the perfect time to relitigate the oldest argument in real estate.
So here it is. If you were buying rental number one today and could only optimize for one thing, which would you pick:
A) The pricey appreciation market. Thin or negative cash flow now, but you're betting on long-term equity and rent growth.
B) The affordable cash-flow market. Money in your pocket every month, slower appreciation, and easier to sleep at night.
No "it depends" allowed. Pick a side and tell me why. I want the reasoning, not just the vote, and bonus points for a real number from your own portfolio.
I'm asking because I'm putting the best answers in Thursday's edition of the BiggerPockets Investor Brief, in front of the whole list. If you've got a take that'll make people rethink their strategy, this is your shot at the spotlight.
Garrett
I'm taking B every single time. If I'm buying rental number one, I want cash flow from day one. Appreciation is great, but appreciation doesn't pay the mortgage, cover repairs, or help me buy the next property. Too many investors convince themselves they're investing when they're really speculating on future appreciation. My view has always been that if a property doesn't cash flow, you're not building a business—you're buying a liability and hoping the market saves you.
For the bonus points, my own portfolio of 8 rental properties (and growing fast by running the BRRRR model) currently cash flows about $2,400 per month, and those properties are appreciating too. The difference is that appreciation was never the reason I bought them. The goal was to create income from day one and let appreciation become the bonus. That's why I continue to like markets such as Memphis, where it's still possible to find properties that hit the 1% rule and produce real cash flow. If I get monthly income, loan paydown, tax benefits, and appreciation, I've got multiple wealth-building engines working for me instead of betting everything on one outcome.
Cash flow also gives you options. It helps you survive downturns, self-fund repairs, qualify for additional financing, and continue scaling without constantly feeding your portfolio from your day job. Appreciation is wonderful when it happens, but I don't want my entire investment thesis resting on something I can't control. For rental number one, I'm choosing the asset that pays me today and letting appreciation take care of itself over the next decade.
8 properties are averaging $300 a month each, so $28,800 year? FWIW even going back 30 years when $300 was probably equivalent to $600 today I was able to cash flow at least $300 per month in class A neighborhoods that were significantly increasing in value also.
$300/month is not bad. This is after a very nice rehab with virtually little to no maintenance or capex for several years. If you are worried about $300/month then you need to invest in something with more short term returns, not real estate. My properties will eventually cashflow even more as I hold them by rents increasing, eventually will refinance will a lower interest rate, and of course my net worth is building. Trust me, I would love $600/month but its just not realistic in my market, which I am fine with.
I will start by saying it is a tough RE market and if you are getting $300/month cash flow when properly allocating for all expenses (including PM) and vacancy that is good cash flow for the price point of Memphis.
However, without appreciation that is not enough to justify the effort and risk of residential RE ownership. You require leveraged appreciation to make residential RE worth the effort and risk.
My worst appreciating property has appreciated $2600/month. One unit that I purchased for $167k using leverage. My investment fully recovered in just over a year.
What do you think the rent has grown by with that level of appreciation? My rent has increased nearly $3k/month. This worse of my portfolio property had some small initial cash flow at purchase but let’s say it was just break even, what do you think it would cash flow if the rent has increased $3k/month? The reality is I extracted value out and the cash flow is modest (modest cash flow is a theme of my properties because I emphasize total return which is achieved at high leverage) but it would be outstanding if I had not extracted value out.
Now look at one of my better appreciation properties. Purchased 4.5 years ago and has appreciated ~$20k/month. Rent went from $6k (that was very negative with my underwriting) to $20k/month (PITI is just below $9.5k/month) and having modest positive cash flow (on top of the $20k/month of appreciation), my underwriting shows $1250 positive cash flow (modest, but poor for the level of equity).
These numbers make a life style impact and justify the effort and risk of RE. Investors require leveraged appreciation to achieve life changing returns. note i am not stating you are not there or on your way to there when you include your appreciation (have you calculated your monthly appreciation on the 8 properties, you may be pleasantly surprised at the numbers).
The sum total of my modest cash flow ends up being significant (I am retired doing what I want - yesterday it was a nascar race), but the appreciation has made me wealthy.
Something to ponder.
Good luck
Hey @Dan H., let me provide more context by saying that I have been buying most of these properties with $10,000-$12,000 out of pocket or less using 100% hard money loans, having them rented and refinanced within 90 days, and then bringing nothing out of pocket when refinancing and sometimes getting cash back. This usually allows a 30% - 40% cash on cash return and then I get to benefit from everything else that comes along with it. I did just looking up my monthly appreciation and it does not like my accounting software for my rentals (REI HUB) has that feature. What are using to calculate that? If I had to make an easy assumption using 3% across 8 properties, my portfolio value currently is $1,487,175 and so I took that and put it into ChatGPT and this is what it told me:
"Using a conservative 3% annual appreciation:
Annual appreciation:
$1,487,175 × 3% = $44,615.25 per year
Monthly appreciation:
$44,615.25 ÷ 12 = $3,717.94 per month
So your portfolio is appreciating at roughly $3,718 per month under a 3% annual appreciation assumption.
To put that in perspective:
- 2% appreciation = about $2,479/month
- 3% appreciation = about $3,718/month
- 4% appreciation = about $4,957/month
- 5% appreciation = about $6,197/month
When you combine that with principal paydown from tenants and your monthly cash flow, you'll get a much more complete picture of your true wealth-building rate. For many Memphis BRRRR portfolios, appreciation is actually the smallest of the three wealth drivers, with loan paydown and forced appreciation often doing more of the heavy lifting."
Hopefully that answers your questions and provides more context and visibility. Also, what markets are you investing in currently?I use actual numbers:
(Current value - (purchase price plus immediate rehab,repair costs)) / (months of owning).
Note calculating using actual numbers includes initial value added that is in excess of price of the value add (includes the forced appreciation). If you are refinancing and getting money out, then this will almost definitely increase your appreciation far above 3%/year
Neighborhoodscout shows my market average appreciation is a little below 6% a year for this century on average. Those that purchase below market, add value, understand and use sophisticated value adds, and/or concentrate on areas likely to appreciate faster than market averages can do far better that this average (and I suspect you are doing far better than your area’s average appreciation rate due to the value adds and I suspect purchasing below market price).
Now if I use your 3% number (which you are almost for sure doing far better than) your $3718/month equates to $930/month per property (divide the monthly appreciation by the 8 properties) or over 3x your cash flow from the properties. remember I believe you are doing far better than this and would not be surprised if your number was more than double this.
Seeing that you are typically extracting your full investment in 90 days, you have an incredibly high return. You also have far more return from appreciation than you likely are thinking.
I will show by an example that ignores the initial 90 days you had lower LTV because with time this short trap of capital really is not a significant. Let's say at the refinance you have 1% of value invested (in reality you have $0 invested, but division is complex as you approach 0), then the 3%/year appreciation has an initial return on your investment of 300%/year due to the leverage multiplier. your return from appreciation in reality is many times higher than this 300% in the initial year because you have none of your investment in the property (due to the period you had money invested, it is not an infinite return - that would require never having any money invested).
You are doing awesome. Your return is awesome. Your cash flow is good for your price point and the current market. I applaud you for making your numbers available.
What I hope I showed you and others is the return from appreciation versus cash flow and which is likely to create great wealth. The reality is your wealth position is at least 3x the result of appreciation over cash flow but I suspect the actual appreciation number (including forced appreciation) is significantly more than 3x the return from cash flow. Your wealth has largely been the result of the appreciation and the cash flow is the bonus that can easily be accessed on a monthly basis (but taxed annually).
Now project a decade in the future with a net worth many times higher than your current property value, A monthly non w2 dollar return many times higher than your current cash flow and significantly more than you need to live, and you are in a high tax bracket. You no longer need the cash flow to live a very nice life. Then your RE investing will focus on total return and will concentrate on appreciation (including forced appreciation). You have little need for more cash flow that nearly 40% will go to income taxes (in my state, your state will be less than what I pay).
You are doing great. Your return is great (mostly achieved via leveraged appreciation including the forced appreciation). Your cash flow is good (for current market and price point) and provides immediate motivation.
Best wishes (but I suspect you do not need it - your current path is great)
Hey @Dan H., good stuff! Thanks for this! I need to look into that more! Also happy to share numbers and appreciate the high level breakdown on this portfolio outlook. Happy Investing!
Jordan Ray - eXp Realty5110 Reviews
- 3moAdam BartomeoBusiness MemberReal Estate Broker · Cape Coral, FL · Member since 2015 · 2k+ posts · 1k+ votes
There isn't a right or wrong answer. It will depend on your situation. I am at a stage where I invest for appreciation and do not have to worry about cash flow in the short term, 1-3 year. If you are able to do this then appreciation will ALWAYS outweigh cash flow as the better investment.
Bartomeo Property Management4.7150 Reviews - 3moHenry ClarkPro MemberDeveloper · Member since 2020 · 4k+ posts · 4k+ votes
New investors always go for Appreciation. You have far more advantages and options than Scaled investors. Plus less cash. You need to start your Cash Snowball. No taxes in $250,000 gain 2 of 5 years primary, no down payment options, lower interest rate option, house hack, BRRRR, ADU, subdivide, YOU are a guaranteed tenant if you live in it, SF LA NYC do squatter investments, etc etc. Always think of $200 per month before taxes cash flow. Versus $250,000 tax free appreciation.
Retirees or people at Financial Independence think of Cash flow and wealth preservation.
Scaling both cash flow and appreciation are needed to scale other wise you hit a choke point. They can be two different types of investments.
- Wholesaler · Miami, FL · Member since 2026 · 22 posts · 3 votes3mo
Quote from @Garrett Brown Brown
I’m choosing cash flow. Appreciation is great, but it’s something I can’t fully control. Cash flow pays me every month, helps me weather market downturns, and gives me the flexibility to reinvest into more properties. A property that puts money in your pocket today can still appreciate tomorrow. But a property that’s losing money every month while waiting for appreciation can become stressful very quickly. I’d rather own assets that generate consistent income and let appreciation be the bonus, not the strategy. - Renter · Thailand · Member since 2026 · 5 posts · 7 votes3mo
B, the only way to DSCR
- Wholesaler · Member since 2026 · 15 posts · 4 votes2mo
Cash flow first — appreciation is a bonus not a strategy. Markets where you actually cash flow from day one give you staying power when rates shift or values dip. Appreciation only matters if you're selling, cash flow pays you every month regardless.
- Real Estate Agent · Chicago, IL · Member since 2017 · 2k+ posts · 2k+ votes2mo
Those cheap markets that “cash flow” usually really do not cash flow in real life assuming using management and properly budgeting the extra wear and tear of cheap area tenants. You get cash flow as the property appreciates and equity starts to pile up, the rents grow along with it. You also cash flow from a large value add that creates equity. Nothing with little or no equity is going to really cash flow, regardless the area.
Join the conversationCreate a free account to reply, vote on answers and follow this thread.