Real estate investing has a few different profit centres — cash flow, mortgage paydown, tax benefits, and appreciation. Today is about appreciation: the natural rise in property values over time. Prices climb for real reasons — population growth, a strengthening economy, low interest rates, or simply not enough housing supply to meet demand. It’s also the most talked-about of the profit centres, and it’s easy to see why. On paper, it can produce the biggest numbers of them all.
“When you invest, you are buying a day that you don’t have to work.”
— Aya Laraya
Personally, I’ve never built a plan around appreciation. I learned early that buying a property mainly for its future price growth is really just speculation — you can never guarantee when, or by how much, values will rise. What you can plan around is cash flow and mortgage paydown, which we’ve covered in previous newsletters. That said, appreciation is still a powerful profit centre. On a $500,000 property, even a modest 2% increase nets $10,000 in profit, and appreciation compounds year over year. It can also swing from steady to explosive depending on market conditions — Alberta saw that firsthand in 2007/2008, and again in 2024/2025.
To hammer the point home: if a property can’t survive long enough to appreciate, is it really a good investment? Buy for cash flow and mortgage paydown, and you can ride out downturns even if the property’s value dips for a while. Then, over time, that downturn moves into an upturn — and your patience is rewarded as the property appreciates.