Quote from @Marc Zak: In the market where I live (San Diego), appreciation has been strong and many predict it will continue to appreciate in the long term.However, with current interest rates (6% at best) and property tax (2%), the annual cost burden is 8%.Am I correct in saying that appreciation has to be above 8% annually (plus whatever my maintenance and vacancy costs are) for me to make any money in this scenario if the property is cash flow neutral?

I’m looking to invest out of my home state, Texas, and have narrowed it down to 3 markets.

We manage several hundred rental properties throughout the San Diego market and I found your post very interesting. 

I would always lean towards markets that are landlord-friendly. 

Looking for both Real Estate Agents in that market and fellow Military who do RE investing there. 

Beside the government regulation and insurance shutting down certain markets, STR industry will continuously grow.

@Rajesh Kasturi My favorite MTR market for cash flow AND appreciation is Portland, OR. 

From there we identify properties that could have some potential and if you are interesting in diving deeper, 1) we do a thorough video walkthrough to give you a realistic look of the property, 2) we give a ballpark estimate of rehab costs (we do 40 a year with our GCs o we will get pretty close), 3) we talk through market rent with our property management team, ARV, and potential highest and best use.Ideally you find great investor agents who know their market really well and have a network of resources to provide you with enough confidence to take reasonable action. 

Rich Ng That's good to know, I know people who have had issues in Salem with big differences between market and section 8.

The high appreciation market will be the higher cash flow market over the hold.