If cash flow is the same, better to buy less or more expensive...

[Elizabeth Woolf]

I'm looking at 2 types of homes. Both would give me about $500 positive cash flow.

1. $500 monthly cash flow, higher mortgage payment, higher depreciation expense, slightly higher appreciation expected.

2. $500 monthly cash flow, lower mortgage payment, lower depreciation expense, slightly lower appreciation expected. 

Thoughts on pros and cons of each? Right now I'm thinking that the lower priced home would be better because I can theoretically continue to buy more homes because I'll have more cash available for down payments, but I have a long term buy and hold strategy so I don't want to ignore appreciation. Both homes are in nice neighborhoods and so far I have 3 high quality single family homes that have always gotten premium rents so I'm continuing with that niche.