Cash flow vs Appreciation properties

[Jordan Sutherland]

Hey everyone,

I'm 33 years old and new in the whole real estate investing thing. I'm closing on my first investment property in 1 week! I have heard a lot of different  opinions from friends and family about real estate investing and what kind of properties to buy.Im interested in buying properties and keeping them for the long haul to gain financial independence. My question for you is this: Is it better to purchase properties that are in lower income neighborhoods that will make good cash flow and good CoCROI, but poor appreciation? Or is it better to purchase properties that are in middle/upper class neighborhoods that will provide poor cash flow and CoCROI, but will most likely appreciate very Well and attract good tenants? Thank you all for the input!

[Chris Eaker]

@Jordan Sutherland

I buy for the cash flow and CoC return, and do not factor in appreciation. I can accurately estimate cash flow and return, but not appreciation. Appreciation will be the icing on the cake. But since I want to hold the properties for the cash flow (I want financial independence, too), then appreciation is not important to me.

I will say though that in order to get good cash flow, you don't have to buy in lower income areas. Higher income areas can give good cash flow, too. It all depends on the area, the rents that can be had there, and if you buy right.