First rental property

[Jessie Staples]

Hello everyone!!!

Looking for advice on first property,

Currently looking at 2 different types of properties, one is a duplex in a small town, where properties don't  go up much in value but has good cash flow, the other is a townhouse located in Hamilton in a nice area, which I think will increase in value well but the cap ex is very low.

What is more important monthly cap ex or future value?

thank you all

[Oscar Cardenas]

Well, a few terms need correcting.

Cap Ex = Capital expenditures. That is a term to signify large expenses like a roof replacement, furnace, ect.

I believe you mean Cash Flow. Cash Flow is whats left after paying PITI , expenses (like utilities and HOA), vacancy rate, cap ex, prop management.

As for where you should invest, both potential appreciation and cash flow are important. Some investors put more importance into one than the other. In your case you are comparing a townhouse to a duplex which will just naturally have different cash flow numbers even in the same area. Try speaking to a local realtor to see about the market in the small town. Sometimes it will surprise you how much small towns appreciate.