FORCED APPRECIATION

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One of my favorite reasons to use real estate as an investment vehicle is forced appreciation, which is value that is gained because the property is improved.

Market Appreciation

Market appreciation is the gradual increase in value of every property in the market. It is driven by large macroeconomic factors.

Forced Appreciation

Forced appreciation comes in a much shorter timeframe. It is appreciation that comes from improving the property or improving the management of a property.

Forced appreciation typically is incremental and occurs with bursts of activity. It can even be paired with market appreciation for more dramatic results.

What About the Long Term?

Multi Family Vs  Single Family

Forced appreciation benefits both multi family real estate investors as well as single family investors. The way it impacts both is different though.

Forced Appreciation is Like Climbing  the Stairs

Forced appreciation is repeatable. By creating 30% of value, that is something you can then go to a bank and refinance based off of. 

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