March 19, 2015

Appreciation Rate of Our Rental Properties at ~3%

Part of rental investing is property appreciation.   You don't want to count on appreciation too heavily but you can certainly benefit from it.   Generally I expect real estate to appreciate roughly 3% annually long term.   Of course that varies a lot from location to location and region to region but overall I think 3% is a decent baseline.    As it turns out our rentals have appreciated about 3% total thus far.

I pulled price values off of Zillow and also referred to the site to get our original purchase dates and years.   Using that I figured our current growth rate on the properties values:

Here's the table :

paid Zestimate CAGR
2002 $45,000 $127,000 8.3%
2006 $95,000 $151,000 5.3%
1999 $141,500 $219,700 2.8%
2002 $134,000 $209,000 3.5%
2003 $166,000 $137,000 -1.6%

4 of our properties are up in value and one has lost value.    The cheaper two properties are up significantly more.   The other two properties are up 2-3% range.

If I sum up the total amount paid versus the total current value and then use 2002 as a rough average purchase date then the growth comes out to 2.9% for the lot.


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