Cash flow vs Appreciation

[Lila Chen]

I am considering whether to focus on properties that generate cash flow or those that have potential for appreciation. I am looking to understand the pros and cons of each approach, as well as the risks and potential profits involved.
I will appreciate it If anyone can share their experiences or insights about when it's wise to consider one strategy over the other.

[Ben Firstenberg]

The biggest pro of cash flow is, in my opinion, lower risk. If you find a really good cash flowing property, it should cover the mortgage very easily, even with today's interest rates. You might not always MAKE money, but it's less likely you'll lose money. 

With an appreciation property, your rent income will barely cover the monthly expenses and mortgage. You might just break even in a good month. In a bad month, you might lose money. 

But of course, property appreciation is how you get REALLY wealthy in this game. If you buy a true cash flow property, it may be worth $250k today and $250k in 10 years. That's how it goes in a lot of these midwestern markets, for example. So you might get some great passive income to supplement or replace your W2, but you're probably not going to send your kids to private school with that kind of money.