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$1100 rental income minus a $1000 monthly mortgage payment equals an extra $100 each month. Appreciation refers to property value... it always has. If you own a $150K valued house this January, next January it should appreciate to $165k earning you an extra 15k in equity.
Jürgen- I don't agree with your formula... rental income should be 1% of the home value. Personally, I think this is a very unrealistic number. There is no way a $150k home will rent for $1500/month. Rent cannot be calculated by a formula but by market research in order to be accurate.
Just my $.02.
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