Considering a buy and hold strategy of owning rentals

I am currently thinking about buy and hold, or acquiring property and renting it out. There is some money to be made by collecting more rent than it takes to pay your expenses, but the real money comes from the expected long-term appreciation and the slow and steady increase of your equity in the property. If you were able to acquire a property with a mortgage and just keep it rented for the life of the loan, you would effectively have earned whatever the value of the property is, passively, even without making any profit on the rent. Initially, to acquire a property, I would need about 25% of the purchase price to put down in order to secure an investment loan. Since I will not be living in the property, FHA and other low down-payment programs really won't be an option for me on this deal. Once I purchase and rent out a property, I would begin to save for my next down payment, and in 1-2 years I could potentially have a down payment ready to acquire a second property.

Also, several years from now when I have multiple properties, I could potentially tap the equity of my oldest properties to help me come up with a down payment faster so I can exponentially increase the rate at which I acquire rentals. In other words, after I have had a property rented for several years, it will have built up equity because the tenants paying rent are slowly paying off my mortgage. I can then borrow money against that equity and use it as cash to secure other properties. If I am able to make the numbers work with 15-year loans instead of 30-year loans, this will be even more effective as my equity will be building up much quicker and less of the monthly payments will be going toward interest which ultimately lines the bank's pockets but not mine!

After I acquire a number of properties, I essentially have my future income and ultimately retirement secured. Once the mortgages are paid off, all that rent money becomes my income instead of my mortgage payments, less expenses such as repairs and occasional vacancies of course.

The major downside to this strategy is that the area where I live does not tend to provide a great ratio as far as purchase price vs rent prices and expenses. Also, frankly the prices around my areas (Queens and Long Island) are very high and I do not have enough capital to put down 25% on a property except those that are ready to be condemned, or located in war zones. So I may need to either save more money before I can get started, or look for other areas nearby where the numbers are more favorable for a landlord.