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Real Estate · Return

Appreciation Rate

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Use appreciation rate to measure property value growth between two valuation points.

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Interactive workbench

Value growth

New Value−Original ValueOriginal Value

The property increased by $60,000 on a $400,000 basis, or 15%.

Step 1 of 3

Variables and units

  • Original Value

    Original property value.

    currency

  • New Value

    New property value.

    currency

Common mistakes

  • Dividing by the new value instead of original value.
  • Using appraised value and sale price from different dates without context.

Step-by-step example

Value growth

  1. 1. Start with the example inputs

    • Original Value$400,000
    • New Value$460,000

  2. 2. Apply the formula

    New Value−Original ValueOriginal Value

  3. 3. Run the numbers

    15%

    The property increased by $60,000 on a $400,000 basis, or 15%.

What this result means

An appreciation of 15% is the total percentage gain in value over the whole holding period, not per year. For multi-year holds, annualize it (see Compound Annual Growth Rate) before comparing it against other investments.