Appreciation
The increase in a property's value over time. Market appreciation comes from broader economic factors. Forced appreciation comes from improvements you make to the property.
Key Points
- Understanding appreciation is essential for evaluating real estate investments
- This concept helps investors compare opportunities objectively
- Our Free Snapshot tool automatically calculates relevant metrics for any property
Related Terms
Forced Appreciation
Value increase created through property improvements, better management, or increased rents—rather than market forces. This is the core strategy of value-add investing.
Depreciation
A tax deduction that allows investors to recover the cost of income-producing property over time. Residential rentals depreciate over 27.5 years. This paper loss can offset rental income without requiring actual cash outlay.
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