Forced appreciation
Value added by improving the property or the income it generates. Different from natural appreciation, which comes from market movement. Investors focus on forced appreciation because they can control it.
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Where this comes up: getting ready
Part 1 of 4
Why a seller cares
Forced appreciation is value you add by improving the home or its income, as opposed to waiting for the market. It is what pre-listing work is, and it is what the investor buying your house plans to do after you leave.
Part 2 of 4
A simple example
A $6,000 refresh, paint, fixtures and landscaping, moves a home's likely sale price from $285,000 to $300,000.
| The improvement | What it tends to return at sale |
|---|---|
| Paint and fixtures | More than it costs, in the first two weeks of showings |
| A new roof | About what it costs; buyers expect a roof |
| A pool | Less than it costs, in most markets |
Forced appreciation is the value you control. Some improvements force more than others.
Part 3 of 4
What people get wrong
That every improvement forces appreciation. Some return less than they cost, and a seller's taste is not a buyer's.
Part 4 of 4 · where to read next
Where it appears in the sale
What a definition is, and what it isn't
Keighbor is a software company, not a law firm, brokerage, or tax adviser. This is general information, not legal, tax, financial, or real estate advice about your sale. Your situation may differ. Before acting on a contract, disclosure, title, tax, or pricing question, ask an appropriately licensed professional in your state.
Written and researched by Keighbor Research · drawn from the reference glossary · how we research and check what we publish
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