The growth in your ownership stake in a property as you pay down the mortgage.
Equity buildup is one of the four sources of return in real estate investing (alongside cash flow, appreciation, and tax benefits). Each mortgage payment reduces the loan balance and increases your equity in the property. Over time, this 'forced savings' can become substantial — even if cash flow is modest.
Equity = Property Value − Outstanding Mortgage BalanceEquity equals current property value minus the remaining loan balance.
You purchased a property for $300,000 with a $240,000 mortgage. After 5 years, your loan balance is $216,000 and the property is now worth $340,000. Your equity has grown from $60,000 to $124,000 — a $64,000 increase from a combination of mortgage paydown ($24,000) and appreciation ($40,000).
Richify automatically calculates equity buildup and other key real estate metrics for every property in your portfolio. Instead of plugging numbers into spreadsheets, you get instant analysis with built-in AI-powered insights to help you spot trends and opportunities across your holdings.
The process of paying off a loan through regular payments that gradually reduce the principal.
The increase in a property's market value over time.
The ratio of a property's loan amount to its appraised value or purchase price.
The net cash a rental property generates after all expenses including mortgage payments.
Stop calculating real estate metrics by hand. Richify computes equity buildup and 10+ other key metrics for every property in your portfolio.
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