For a while, appreciation carried a lot of deals. Now I’m seeing more investors shift back to: • Strong cash flow • Safer rent assumptions • Less reliance on future value The question is: Are you prioritizing cash flow again or still betting on appreciation?

Cash flow is still important, but it stopped being the only metric that matters a few years ago. The investors I see actually building wealth right now are running total return math: cash flow plus principal paydown plus appreciation plus tax benefits. That said, cash flow isn't dead. It's just harder to manufacture with conventional financing. At 7% rates, the numbers barely work in most markets. At 3.25% they work fine. I closed a deal last year where a buyer assumed an FHA loan at 3.25% on a $380k purchase. Monthly payment came in about $900 less than a new loan would have been. Same house, same rent, same market. Just a different loan. That property cash flows. Most comparable properties in the same zip code don't. So part of the "is cash flow still achievable" conversation is really a "how are you financing" conversation. The guys treating 7% as the only option available are playing a different game than buyers who know how to find below-market rate loans. But even outside of creative financing, pure cash flow markets still exist. Midwest, parts of the South, smaller metros. You can absolutely buy a $150k duplex in Kansas City or Cleveland that cash flows $400/month. That's not dead. What's actually dead is the idea that every market and every asset class should cash flow from day one. In high-appreciation markets you're probably building wealth through equity growth and you should model it that way. What market are you investing in? That context changes the answer a lot.

The answer is it depends on the investor and their time horizon. For example, cash flow is not super critical for me. I do not want to be cash negative, but I don't need significant cash flow at this time. I am okay holding real estate for 7 to 10 years or even longer and playing the appreciation game. That has worked very well for me over the past 10+ years. While I anticipate prices are too soft and/or will stay flat over the next several years, with potential for minimal appreciation, it is not going to change my investment strategy because my horizon is longer than that time period.

Cash flow is the whole business for me. I don't have a W-2. Sold my restaurants in 2021 and went full time into rentals. So when people talk about "total return" and counting appreciation and tax benefits, that's fine if you have a day job funding your life. I've got 14 houses in Jacksonville and every single one needs to cash flow because that's my income. Still doable in the 130-180K range in JAX, even at DSCR rates in the high 7s and low 8s. But it's tighter than it was two years ago and the thing that's squeezing me harder than the rate is insurance. My premiums went up about 40% across the board over the last two years and that wasn't in my original underwriting on the earlier deals. A property that cash flowed $250/month in 2023 might be at $100 now just from the insurance hit. Florida is rough for that right now. The rate is what it is. I can shop DSCR lenders and usually find 50-75 basis points of spread on the same deal if I get enough quotes. That actually moves the needle. But you can't shop your way out of a $3,800 insurance bill on a $170K house.

If you need the cash flow to pay the bills, then cash flow is critical. I am fortunate that I do not need significant cash flow from any property to live a very luxurious life from my RE investments (I do not have a w2). I am all about total return, but I place the least value on the cash flow. This is because cash flow is taxed in the year earned. The other sources of return are tax free or tax deferred, Maybe it is due to this mindset, but appreciation has by far been the largest source of my return. It is not close. My worse appreciating property has made more in appreciation than my best cash flow property by a huge margin. Before the fairly recent interest rate increase, I regularly refinanced to increase leverage, maximize return, and decrease my cash flow (and my taxable income). I believe the need for cash flow somewhat depends on where you are in your RE investment journey. Many/most newbies require cash flow. Those who have been successfully investing in RE for a while do not need the cash flow. Good luck

Frankie, great question and the timing is perfect. I manage rental properties in Nashville and I can tell you cash flow is absolutely still king here, but the definition of what counts as good cash flow has changed. In 2021 and 2022 people were buying Nashville rentals at 350k and projecting 2000 a month in rent and calling it a deal because they assumed 10 percent annual appreciation would cover the thin margins. That math stopped working when rates hit 7 percent and appreciation flattened in 2023 and 2024. What I am seeing now from the owners I work with is a much more disciplined approach. The ones doing well in Nashville are buying in the 250k to 375k range in neighborhoods like Donelson, Hermitage, Madison, and parts of Antioch. They are getting rents between 1600 and 2200 depending on the property, and they are underwriting to actual operating expenses not projections. The biggest cash flow killer I see is people underestimating operating costs. In Nashville specifically, Davidson County property taxes have jumped significantly over the last two reassessment cycles. Insurance in Tennessee is climbing 8 to 12 percent per year. If you are not budgeting 45 to 50 percent of gross rent for total operating expenses including vacancy, maintenance, taxes, insurance, and management, your cash flow projections are fiction. My answer to your question is that cash flow was always king. Some people just forgot that during the appreciation run. The investors who kept their focus on actual monthly numbers are the ones still standing with performing portfolios today. The ones who stretched to buy on appreciation alone are the ones calling me asking for help because their properties are bleeding every month.

When you read all the posts here a pattern emerges: new investors put cashflow first, old investors bank on appreciation (because they have seen it). Cash flow is not king, it is a necessity. It keeps the lights on while you wait for appreciation. Average cash flow is $200/mo - that's not very "king". You'll never get anywhere with cash flow. Wealth comes from appreciation. All you have to do is click on a BP calculator, punch in some numbers and look at the long term bottom line. Cash flow is peanuts. Appreciation is also not luck or rare; it is a feature of our financial system. Real estate appreciates at least with the rate of inflation. And like @Dan H. has pointed out, even only 2.5% leveraged 1:4 already is 10%. But the reality is that inflation is higher and appreciation is higher - historically about 6%. Over the last 100 years US real estate has doubled every 15 years in value. Sometimes a little faster. Once you understand that, everything changes. You though cash flow hood properties where the way to go, but now the class B subdivision starts to look quite a bit different. In comparison cash flow pales, it is just necessary to keep you afloat.

Based on what I’ve read in several books, cash flow is king. I don’t believe it’s wise to invest in a property that produces negative cash flow or barely generates enough to cover expenses.

Hi Frankie- Great question! You asked should you prioritize cash flow over appreciation when evaluating investments. Personally, I think having strong cash flow is still more important than appreciation because appreciation can compress or disappear as we are seeing in the more cyclical markets right now but cash flow will always pay the bills and you. There are still many markets in Michigan with strong cash flow. To Your Success!

Updated 25 days ago on 05/12/2026. Most recent reply

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Frankie VozziPoster

General Landlording & Rental Properties

Is Cash Flow Still King in 2026?

Frankie VozziPoster

Posted April 29, 2026 09:49

For a while, appreciation carried a lot of deals.

Now I’m seeing more investors shift back to:

Strong cash flow
Safer rent assumptions
Less reliance on future value

The question is:
Are you prioritizing cash flow again or still betting on appreciation?

Frankie Vozzi
[email protected]
(516) 888-7750

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Priya Menon

Rental Property Investor
Indianapolis, IN

Priya Menon

Rental Property Investor
Indianapolis, IN

Replied April 29, 2026 20:07

Cash flow never stopped being king for me. I've got 6 SFHs in Indianapolis and every single one had to cash flow from day one or I passed. The 130-160K range in Indy still works even at current DSCR rates if you buy right and screen tenants well. My last two deals were at 7.6 and 7.9% and they still cleared my 8% cash-on-cash threshold, they just took 6-8 months each to find instead of a couple weeks like back in 2020.

Appreciation has been a nice bonus on my earlier properties but I've never once underwritten a deal counting on it. If the cash flow math doesn't work on the day I close, the deal doesn't work. That's kept me out of trouble for 6 years.

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