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
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The term “de jure” comes from the Latin “by law” or “by right” and is commonly used to describe something that exists according to the law or by right. ...
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A lien on property such as for the nonpayment of real estate taxes or mechanic's lien for repairs to the home without the consent of the owner, created by operation of law. ...
One who has committed a tort. A tort is a civil wrong that occurs as a result of a breach of legal duty owed to someone, e.g., negligence. A tort does not arise from a breach of contract. ...
Designing a home with a Spanish cultural flavor. ...
Legal obligation to pay for a benefit received as if a contract has actually occurred. This may arise in a few cases so that an equitable situation occurs. An example is when a homeowner ...
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