Appreciation vs Cashflow?

[Huy Le]

Just want to see everyone’s thought on investing for Cashflow vs Appreciation. I understand, that we should find a sweet spot between these two. But speaking from experiences, does Appreciation worth lost of Cashflow? That is the main question. This fuels the decision of choosing location. A good location could yield strong appreciation overtime that could be larger than the rental cashflow, for those seeking suburban duplex, multifam, etc.

[Bill B.]

If cashflow was the be all end all so many people say, they would all be invested solely in class d $50-$75k shoebox properties. They have the best cashflow. Or maybe mobile homes. 

As of April Las Vegas properties are up 22% yoy. So if you played it safe and put 25% down, you made 88% on your downpayment. If you turned a previous primary in to a rental and only out 5% down you made 440%. 

Last year, on a dozen vegas properties I brought in $200k in rent, profited $150k and cash-flowed $100k. And made about $600k in appreciation. 

On my only out of state property a MN lakefront property (I plan to retire to someday.) I had $36k in rent, profited $20k, and had NEGATIVE $10k in cashflow. It appreciated about $100k last year. 

Nobody expects cashflow from their IRA/401k, they are 100% appreciation plays. Yet nobody bad mouths that.

If you can afford to hold the properties through good times and bad (either solid w-2 income or reserves) most people don’t realize how useless $100-200/mo cashflow is. It’s one water heater, one fridge, 1/2 an ac unit. 

If you don’t think he properties you’re buying will be worth more in 15 years when you pay them off then don’t buy them.