How to Maximize Your Real Estate Investment: Why Appreciation Beats Cashflow

As someone who has owned hundreds of rental properties over the past 19 years, I’ve learned a lot about the ins and outs of real estate investment.

While many syndicators and fractional owners might share their insights, I stand alone in my journey—without partners, forging my path through the single-family home world.

Today, I want to share a hard-earned lesson that might challenge some of your preconceived notions: Appreciation beats cashflow.

The Common Misconception

I can almost hear the chorus of objections:

• "Matt, you're wrong!"

• "Matt, didn't you read Rich Dad Poor Dad?"

• "Matt, you've lost it!"

• "Matt, you don’t know what you're talking about!"

Trust me, I’ve heard it all.

The prevailing wisdom in real estate circles often places cashflow on a pedestal, especially when it comes to single-family homes.

Yet, my experience has taught me two undeniable truths about cashflow:

1. It’s not passive.

2. It’s not consistent.

The Myth of Passive and Consistent Cashflow

Pro-formas, those beautifully crafted documents predicting rental income, are often liars.

They rarely hold up to the realities of property management.

Unexpected expenses are a given.

The cost to "turnover" a property when a tenant moves out often surpasses the security deposit.

Maintenance costs have skyrocketed, and today’s tenants (often millennials) may call for maintenance over the smallest issues, further eating into your monthly cashflow.

Insurance costs have doubled unexpectedly, making it even harder to maintain consistent cashflow.

These rising costs can turn a seemingly profitable property into a financial burden.

The Real Goal: Appreciation

Now, I’m not suggesting you buy houses that don’t cashflow.

Cashflow should be goal number two when purchasing a rental property.

But what should be your primary goal? Appreciation.

Ask yourself:

• Will this property appreciate over time?

• Does the area support appreciation?

• Does the house type support appreciation?

If the answer is no, find another property or wholesale it to someone else.

In my nearly two decades of experience, the properties that have yielded the highest returns were those that appreciated significantly.

Balancing Appreciation and Cashflow

"But Matt," you might say, "the houses that will appreciate the most don’t cashflow well."

Then don’t buy them—wholesale them. Keep searching until you find properties that offer both likely appreciation and cashflow.

These are the gems to add to your portfolio.

You can’t count on appreciation, just as you can’t count on consistent cashflow.

Nothing is guaranteed in real estate.

However, when cashflow diminishes or disappears, equity—built through appreciation—is what will save you.

If you need assistance in finding houses with equity, appreciation potential, and cashflow potential, I got you.

My team of cold callers, armed with the best data available, can help you secure properties that offer all three.

In the end, after 19 years and hundreds of properties, my most successful investments were those that appreciated the most.

Cashflow is important, but appreciation is the key to long-term success in the single-family home market

Click HERE to learn more about my Cold Callers.