Property Appreciation
Definition of "Property appreciation"
Appreciation, or property appreciation in real estate is the increase in the value of a property or asset over time. This increase in value can be due to a number of factors; inflation, population growth, economic growth of an area, etc. Property appreciation can occur under a variety of different circumstances and with virtually any piece of real estate. Appreciation is the opposite of depreciation. Let’s explore some examples of appreciation in real estate.
Examples of property appreciation in real estate
Joan is a young woman in her early 30’s. After finishing a masters degree in finance, Joan finds an excellent job with a good salary at a stock brokerage company. As she nears her mid thirties, her house is paid off and she has saved up a tidy sum of money. With her savings, Joan invests in a cozy little bungalow in the suburbs, spending a reasonable sum of $125,000.
After finding a tenant and contracting a property management service, Joan begins to reap the rewards of her investment. However, after a few years of being a landlady, Joan tires of the responsibility and stress of maintaining the property, and decides to sell. After contacting a real estate agent and finding a buyer, Joan manages to get $225,000, making a tidy profit of $100,000.
The cause for this higher price is what is known as property appreciation. During the time that Joan had owned the house, a mall had been built nearby, a new movie theatre opened and an office complex newly constructed. The resulting demand for housing caused the value of Joan’s house to go up, without her even having to do anything.
Popular Real Estate Terms
Real estate not subject to property tax such as that owned by nonprofit entities including charitable, governmental, religious institutions. ...
Effect on the market price of houses as interest rate change. For example, when mortgage interest rates rise, the prices of houses tend to fall. ...
Person, such as the beneficiary of a deed, asking that he be informed if the property is foreclosed by someone else. ...
Securities supported by a pool of mortgages. The principal and interest are due monthly in the mortgages and are passed through to the investors who bought the pool. ...
Shingles having uniform length, but random width. Random shingles give a creative appearance to a roof. ...
To fulfill , complete, implement, perform, or carry out terms of an agreement including completing a signature on a contract and delivering a document to the intended party. ...
Details of a contract of sale including a financial statement, legal description, type of deed, place, date and time of closing of title. ...
An individual legally fit and able to undertake an activity or function. ...
A long-term lease of only land. ...
Have a question or comment?
We're here to help.