@Matt Donley
There are a lot of good nuggets in this post. Setting up a spreadsheet that analyzes all of the different aspects talked about in this thread can really be effective in comparing apples to apples. The Excel spreadsheet that I have has ROI (cash on cash) with and without appreciation based on different loan products, ARMs 3/1 & 7/1; 15 year fixed and 30 year fixed. This helps me decide how long to hold the property. I figure appreciation based on the average or median (we are in a non-disclosure state so average sometimes gets skewed with many solds being reported as $0.00) price increase based on the micro-segment (condo, townhouse, single family, multifamily, neighborhood...etc) of the market that I am investing in (Idaho Falls or Victor, Idaho or Jackson, Wyoming), where we are at in the cycle, and how long I plan on holding the property. This is one bottom line on the sheet.
The second bottom line on the sheet is the cap rates net and gross.
As @Account Closed pointed out, cash flow is not as important to cash heavy investors playing the low maintenance appreciation game. But it is important if you are trying to look ahead to finance your next deal and don't have a lot of cash or income to float the next deal. You do need to ask your CPA about the depreciation factor as well. From the way that I understand it to depreciate a residential property it needs to be "available for rent".
There are lots of ways to skin a cat but I personally think it is helpful to set up your own spreadsheet with everything that makes sense to you and then over time pay attention to which segments of the sheet make the most sense to you.
