Rental income vs. Property appreciation

[Allan Ringler]

The question for you all... would you rather purchase a property that earns you positive cash flow month over month but very low property value appreciation or a property that barely breaks even every month with greater property value appreciation? This is the situation I find myself in. If I look at multi family properties in Morristown or Montclair, I'm lucky to find something where I can break even month over month but properties there tend to appreciate year over year. And the barrier to entry is very high. If I look at multi family properties in Orange or East Orange, it's much easier to find something that will cash flow positive month over month but these properties don't really appreciate in value year over year. The barrier to entry here is much lower. Ideally, I'd love to find something that will cash flow positive month over month, appreciate in value and doesn't require me to tap out my life savings just to get in. But then again, isn't that what we all want? What are your thoughts? Thanks in advance!

[Jermell Shavers]

@Allan Ringler. I guess it depends on if you’re just starting out and what your goals are. My goals I would get the cash flowing property a huge debt service isn’t something I like to carry and honestly cash is king I started out with A or B class properties but I found my niche in 40k rentals and renting them out for 900+ a month where as my A or B class rents for 1100$ a month but it’s worth it I can buy two properties or 3 C classes for one A or B class. I’ll take the 3 C over the one A or B. 900x3=2700$ I’ll take that and they are much easier to acquire