Rental Appreciation Calculator

How appreciation is calculated

• Total appreciation = current value − purchase price. This is the raw dollar gain, before accounting for inflation, selling costs or leverage.
• CAGR (compound annual growth rate) = (current value ÷ purchase price)^(1 ÷ years held) − 1. This is the equivalent constant annual growth rate that would produce the same total appreciation over the holding period.
• Projections: the calculator shows your current value grown forward 10 years at your actual CAGR and at three benchmark rates (3%, 5%, 7%) for comparison. The 3% rate approximates historical CPI inflation; 5% is near the long-run US real estate average; 7% reflects stronger growth markets.
• What appreciation does not capture: leverage-amplified equity growth (price appreciation on a leveraged asset produces a much higher return on your equity than on the property), rental income, and depreciation tax benefits. The rental property calculator models the full picture.

Worked example

A property purchased for $200,000 is now worth $285,000 after 6 years. Total appreciation: $85,000 (42.5%). CAGR: (285,000 ÷ 200,000)^(1/6) − 1 = 6.08% per year. If the property continues at that rate: $285,000 × 1.0608^10 ≈ $512,000 in 10 years. At a more conservative 3%: $383,000. At 5%: $464,000.

On a leveraged basis, if you put $50,000 down to buy for $200,000 and the property is now worth $285,000, your equity grew from $50,000 to about $135,000 — a 170% total return or about 18% CAGR on your cash invested (ignoring mortgage paydown and cash flow).

Frequently asked questions

What is a good real estate appreciation rate?

Long-run US home price appreciation has averaged roughly 3–4% nominally, close to inflation. Strong markets (coastal cities, high-demand metros) have averaged 5–8% over the past 20 years. Returns above 7% annually are achievable in growth markets but are not guaranteed and come with higher price risk.

Does the CAGR tell me my return on investment?

No. CAGR measures the property's price growth, not your return on equity. Because real estate is typically leveraged, your equity return (ROE) is much higher than the appreciation rate when prices are rising, and more damaging when they fall. The rental property calculator computes cash-on-cash return on your actual invested cash.

How do I find the appraised value of my rental?

For an estimate, use an automated valuation model (AVM) such as Zillow's Zestimate, Redfin Estimate or Realtor.com. For a binding number, hire a licensed appraiser. Local comps (recent sales of similar properties) are the most reliable input. Lenders will order an appraisal before any refinance.

Should I account for inflation when comparing appreciation rates?

For long-term projections, yes. A 5% nominal appreciation rate in a 3% inflation environment represents only 2% real growth. When comparing to other investments, use real (inflation-adjusted) rates for a fair comparison. At CPI around 3%, any rental property growing faster than 3%/year is beating inflation.

Formulas last reviewed October 20, 2026. Results are estimates for educational use; not financial advice. Methodology →