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
Sometimes a landlord agrees to implement within the rent contract the possibility of the tenant buying the house at a certain price, by a certain date. It’s what’s called in the ...
An organized group of ethical behavior guidelines governing the day-to-day activities of a profession or organization. ...
Approving or permitting an action to occur. ...
What is a botel?, you ask. You know hotels, right? And the marketing denomination of them to motorists; the "motel”. Well, the best botel definition is “hotel for ...
Appearing in person. In propria personal is a formal judicial request to appear personally before the court to plead a particular matter. While it does not prevent an individual from ...
An agreement specified in the lease providing the tenant the option to renew the lease for a given time period upon the expiration of the initial lease. Most lease options include the ...
Member of a partnership whose liability for partnership debts is limited to the amount invested in the partnership. A limited partner is prohibited from taking active part in the management ...
Legal abbreviation meaning with husband. ...
To define access rights, we must understand the need for access rights. There are several reasons for using access rights for any property; some are necessary and granted with little to no ...
Have a question or comment?
We're here to help.