cash flow or appreciations (in California)

[Jason Phu]

HI everyone,

My goal to purchase an investment home now is to keep it long term and eventually it will become my place to retire (goal to retire in the next 10 years). At the moments, I'm looking at 2 properties both in California:

-  First one is a beautiful, bigger home, completely high-end upgraded, in a higher value area with a good school district, and of course it comes with a higher cost to buy, rent can only cover the monthly expenses (mortgage, insurance, tax, etc), this one is expected to have higher appreciations in the long term.

- Second one is a decent remodeled home, smaller, in a lower value area, I can get it without financing (pay cash), so it will cash flow (about $2200/moth after all expenses such as tax and insurance), it also has a potential for an ADU, but future appreciation is not as great as the first property due to location.

Which one I should go for? and why?

Appreciate your input!!