You would have to be nuts to invest for appreciation.

[Engelo Rumora]

We all saw in the big crash what can happen to the value of a property. I remember (like it was freaking yesterday) a property an investor purchased seven years ago for 93,000, and that was appraised 7 grand above my purchase price. Eighteen months later it was valued at 40k below my purchase price. Most people would shout a giant "F---" as the banged their head against the wall. Unless of course they knew that it was in $1000 a month rental market.  

Do the math:

$93,000 purchase

- $40k value loss

+ $96,000 in rental income...

(the hell with the fact that the property has regained 100% of its market value)

= Go for the cash M8s!

[Brant Jones]

With everything else in life, there is always a point of diminishing returns where it might make sense to sell or exchange what was once considered a good, stable cashflowing property into something else because it a) no longer fits into your personal investment philosophy, or b) no longer conforms to the 1-2% rule for cashflow. For example, if I purchase a property for $115k, that rents for $1,300 per month, I would consider this to be acceptable and within the 1-2% rule. However, fast forward a few years and the property now appraises for $230k, suddenly that monthly cashflow does not look quite as attractive as the appreciation I have now realized, and I may be able to more effectively use that equity to achieve even greater cashflow somewhere else.

Most real estate books I have read note that early on in investors' careers, cashflow is the primary focus, but as investors become more mature and sophisticated, they tend to shift toward accumulating wealth through appreciation.

In either case, there is no right or wrong answer, but the flexibility we have to influence our destiny through real estate is what makes this business so attractive compared to other investment opportunities.