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Time is the friend of real estate investors

Many times the markets people buy real estate in are so "balanced" that to buy the property at a price where rents meets your monthly obligations are an achievement. Even if your monthly cash flow is even you are still getting a head by leaps and bounds. Historically, real estate appreciation runs at 3-4%. Of course there are sometimes higher appreciation years and sometimes the value actually goes down, but 3% is a good baseline planning average. Add into that the amount of principal the tenants paid for you each month as well as the depreciation effects to your after tax return total income picture. In addition, imagine the dollars that you pay back to the lender to be ever deflating in value due to the effects of inflation (but the interest rate cost is fixed because you were wise to borrow on a long term fixed rate note). Combined these effects amplify your return to compensate for a lack of positive cash flow.