Home Appreciation Calculator

Property Appreciation Calculator FAQ

What Is Home Appreciation?

Home appreciation is the rate at which a property increases in value over time. Mathematically it is the same as all other forms of appreciation, where an asset changes in value based on the interest rate.

In favorable market conditions, property prices tend to increase year-on-year, which can lead to significant equity gains for property investors. However, it is also true that the market will experience downturns, during which property prices will decrease in value. The 2008 Global financial crisis is one such example, while the impact of Covid-19 has also lead to a decrease in property prices in certain parts of the United States.

Ultimately, home appreciation is a fluctuating interest rate which is based on the area in question and the economic conditions of the state or country. When taking a long term view, property prices will increase in value over time in the United States, despite inevitable downturns that occur.

Is Home Appreciation Taxable?

This depends on whether or not you sell the property. If you hold the property,  the appreciation is not taxed. However, if you sell the property, you are liable for capital gains tax, provided the property has appreciated in value over time.

With that being said, there are significant measures in place to reduce the amount of tax you pay if you sell your primary residence. To be more specific, you can exclude up to $250,000 in capital gains when you sell your house. This can be extended to $500,000 if you file a joint tax return with your spouse.

If you sell an investment property, the tax implications are a bit more costly, and it would be best to research this topic further or consults a professional tax advisor.

What Is A Good Home Appreciation Rate?

This is a subjective question that will depend on the individual investor. Generally speaking, the higher the appreciation rate the better.

In America, home appreciation rates have range from 2-6% when looking at time horizons longer than 10 years. As mentioned earlier, the global financial crises caused the real estate bubble to crash, but the market has recovered very well since then.

Ultimately, you could say that 2% and above is a respectable home appreciation rate, and that the higher the number, the better it is for the property investor.

How Do Your Workout Home Appreciation In Your Area?

There are few ways to workout the home appreciation rate in your area. 

The first option is to simply research appreciation rates your particular suburb online, while being vigilant about the information sources you consult during the research process.

The next option is to consult popular listing websites like Zillow, NeighborhoodScout and Homesnap. Each of these websites should help you determine the appreciation rate in your area.

Lastly, consulting a reputable realtor or real estate agency in your suburb or city is also a good option.

Additional Real Estate Calculators & Resources

Rental Property Calculator: Workout the potential profitability of an investment property with our Rental Property Calculator.

Hard Money Calculator: To figure out the ROI of a fix and flip, you need a comprehensive Hard Money Calculator. It allows you to workout the monthly repayments, analyze net operating income, calculate the return on investment when you sell the property.

BRRRR Calculator: Each step in the Buy, Rehab, Rent, Refinance, Repeat (BRRRR) requires detailed analysis before you proceed with the deal. Fortunately our BRRRR Calculator breaks the process down into simple phases that are pretty easy to understand.

ARV Calculator: Quickly assess the After-Repair Value of a property with our user friendly ARV Calculator.

Cap Rate Calculator: Cap Rate is a simple formula that helps investors work out how profitable an investment property is likely to be. Our Cap Rate Calculator makes this easy to do, in very little time.

FlipScout: FlipScout is a free search engine for property flippers. It lets you find properties that you can earn the highest return on when completing a fix and flip or fix-to-rent project. You can learn more about FlipScout here.