Market Appreciation and Forced Appreciation

4 Replies

I’m reading a BP book on rentals and I have a question. How can I determine my rehab on a property will force 10% appreciation the first year? Secondly, how can I determine which property is in a market that is averaging 3% appreciation every year?

@Franky Rodriguez You can find that out by seeing what the After Repair Value estimate would be for the home compared to other homes in the area.

I would answer the 2nd question but I'm not fully understanding haha

@Jake Stuttgen I’m reading “the book on rental property investing,” by Brandon Turner, and he is stating that after renovation of a acquired property the goal for the end of the first year is to have the property have 10% appreciation. And I was curious as to how he could predict that before purchasing.

@Franky Rodriguez You can predict it based on buying a property that is currently below market value, that is also in need of some work. Then you have a realtor figure the After Repair Value of the property, which for what Brandon is saying, should be 10% above what you bought it for/put into it