Buying Condos with limited Appreciation

[Christopher Leet]

Looking at buying single family condos in the Columbia, SC area. All my numbers point to great cash flow and CoC return. My main concern is these condos have limited appreciation upside. I accounted for that in my numbers and still show good cash flow. Looking for some input and thoughts from others who have gone this route in their investing career.

[Will Fraser]

HI @Christopher Leet!  At the end of the day a real asset that doesn't appreciate well is simple one that pulls one fewer lever than others.  All real assets have investing dynamics of cashflow, appreciation, tax favor, and debt pay down (if leveraged), so if you are looking at an asset that has VERY strong cashflow but lower appreciation, you'll simply want to know that going in and compare it to how another asset that DOES appreciate would perform.

In my market there is usually a direct correlation to cashflow and appreciation.  In the areas of town with the most jaw-dropping cashflow you'll see little, no, or even negative appreciation.  In the areas with the best appreciation, you tend to see lower cashflow. 

So, evaluate the opportunity costs and if the condos still hold your interest, dive in :)