Cash Flow versus Growth

A cash flow positive property generates money from day 1. It is a machine that spits out money.

A growth property will often cost you money to hold. The rent you get is less than the amount of interest you pay on the loan that you bought it with. Despite this, people still buy these properties. The reason behind this is that these properties go up in value allowing you to sell for a profit or to refinance to get your money back.

There is merit in both approaches. What it comes down to is how much rental yield you get plus how much growth you get. An investor will normally be after the greatest return.