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
Figure or value which is the starting point in computing gain or loss, depreciation, depletion, and amortization. ...
Suppose you wish to sell your property fast and expect a high return on investment. In that case, it would help to reach out to expert local real estate agents who undertake the job of ...
percentage relationship of a specific part of property to the whole property. An example is the square footage of one office to the square footage of all offices in an office building. ...
Expenditures incurred to improve a specific real estate development; however, these improvements are not directly on the property. Example are curbs, driveways, and streets. ...
Point at which a housing development becomes a neighborhood. After an initial housing development is sold and the new owners become established, the neighborhood stage begins. The ...
Government program of providing low interest rate mortgages to low-income qualified buyers. In the tandem program, the Federal National Mortgage Association (FNMA) purchases low interest ...
Six-by-six mile square area of land designated by the intersection of range lines and township lines in the rectangular survey system. ...
A freehold equity in a n estate, restricted to the duration of the life of the grantee or other stipulated individual. ...
I am the person. The person himself/herself. The actual person. ...
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