How are investors missing this?

[Joe S.]

So I hear people talking big game about owning Properties long term and the cash flow going up.

In some states that are high property tax state like Texas here is what I have seen. 

1. The taxes and insurance are increasing faster than the rent.

[Melissa Nash]

if your PM is doing it right they are raising the rents each year to increase your income. 

BUT...... you should not be investing for just for "cashflow". What I mean is that cashflow should be looked at as the cherry on top. It goes down, it goes up. One month you might have a vacancy, one month you might have a maintenance item. You can't rely on just cashflow. There is so so so much more to real estate than just cashflow and it takes patience. 

------> This is the tortoise and the hare approach. You buy a property that has enough profits in it to cover unforeseen expenses, and then......you save! You put your profits into a HY savings account (email me if you want the one that I use for 4.5% return) then you are making a return on your return. Then if you need to pull $ out for expenses you pull from there. In the meantime it is making money and saving for the next property. 

Now you wait.... let that baby do its thing. If you are leveraged (which is what you want) the tenant pays down your mortgage each month (giving you FREE equity) the property if in a good area is going UP in value ....... you are hedging inflation locked into a long loan. 

Your PM is raising the rents each year and you hold hold hold. 

That is how you grow wealth. Cashflow DOES NOT create wealth. Unless you own like 100 properties, or invest in STR's (yes that is high cashflow). True wealth is created through the asset growing up in value through equity pay down, appreciation and inflation going up. 

Melissa