Expenses naturally rise with inflation - insurance, property tax, utilities...Those two factors, by definition, result in lower NOI down the road than in-place/year 1 NOI.

Appreciation is good enough if it can be better than inflation.

Ah, y'know..... if the annual yearly inspection shows the place to be in spic n span condition, you only raise the rent 1/2 of inflation....Anything else you want to add to make sure that they are treating the property the way you want....

Hopefully when interest rates go down and rents go up in the next 2-10 years, we can refinance and have better cash-flow.Option 2: Pay with cash right now (~1.3M) and with a ~7% cash-on-cash return we conservatively net ~7-8K/month and properties appreciate with inflation.

This is a totally reasonable expectation, but before you jump to that conclusion, you should have all the facts.Typically, a market that has been artificially inflated must eventually come back down.

Now is an awful time to buy real estate because it is over inflated and most people require leverage which is expensive.

Quote from @Michael Plaks: Your math is off, it's much more complicated then that, but the idea described can basically accomplish what you want.Here's how I came up with it:*Assumed sale happens in 2027*Assume 2018 tax changes are NOT extended*Adjust all brackets from 2017 to 2027 using IRS inflation from 2017-2024 and 2% thereafterNumbers are a little different as I posted some rough calculations.  

Interest rates will skyrocket, as inflation comes back. 

You buy it reasonably well, hold onto it and operate reasonably well, and over the long run inflation increases rents and value.

There are many other avenues that can keep a steady, beat inflation gains without a ton of risk.