Theory Question: 10% down, cash flow neutral after all expenses

[Scott Cooper]

Hi BiggerPockets,

Rental yields in my area are low.  To bolster the yields I would need to buy in areas that I would not feel safe managing the properties.  

Instead, in conjunction with a partner, we have been considering buying a number of rentals in good quality neighbourhoods where there is significant demand for rental properties.  The monthly cash flow available after tax, vacancies, capex,  mortgage etc. would be close to zero.

However, if we took the long view on such properties, with the aim to have them cash flowing well in 20 years after the mortgage is paid off, is it still a good investment?  From a long term wealth creation perspective, is there anything wrong with this approach?

Thanks

[Jay Hinrichs]

if there is no appreciation to speak of or hope of then why bother with real estate at all.. you need either cash flow or appreciation. one or the other.  Although there are 4 ways to make money in this rental game.

appreciation

cash flow

some else is paying your asset off get it paid for as quick as possible.

modest tax benefits  ( depreciation) although be mindful of recapture if you want to exit all together.

you have to a look see in your area and see what the potential in any of those are all about.

and keep in mind chasing cash flow to make 100 or 200 a month but take the risk of low end tenants.  

@Jerry W.  give me zero cash flow  tenant paying off my nice home and not destroying it. and some appreciation bump I will take that model over high touch HI risk low value and tough neighborhoods at least as it relates to investors that do not run rentals for a living.. those that do this for a living and there are a lot of you out there.. its just a job for them running and maintaining C/D class cash flow heaven properties.. anyone of them on BP that is honest will tell you its a lot of work. it not just buy an asset and sit back and collect checks.. Tenant base is too transient or on the razors edge of having no money or limited money to live on.. 

@Jason Ray Richardson  I like the mHP  play especially at the price points you have talked about.. i would not buy those quality parks if I was not getting the screaming deals your getting.. they take work to manage that tenant base as well. non of those trailers you have will go section 8 right.. ? so your at free market rents in rural MS. ?