Wealth That Builds Quietly

Passive appreciation is how a property increases in value over time.  
As an area develops or a market grows, wealth can quietly build, without any additional work required.

From 1967 to 2024, long-term housing data shows an average appreciation rate of about 4.27% per year.

If your property goes up a few percent each year, that growth applies to the entire value of the property, not just the amount you invested. That’s why even modest appreciation can add up.

And sometimes, it adds up in a way no one sees coming.

For example…I grew up in Canmore, Alberta. And in 1990, in Canmore, you could buy a house for under $200K (some were listed as low as $119K). 

Fast forward…In 2025, some of those same homes are listed for over $2M. (A few are over $3M.)

No one could have predicted that kind of growth. But the people who held onto the properties and then sold hit the passive-appreciation jackpot. 

That said, passive appreciation has never been the core of my strategy.

Most of the single-family homes I bought were in small towns that were not growing. My goal was cash flow. 

But…when I was trying to decide if I should buy an older apartment building in downtown Saskatoon, factoring in passive appreciation made my decision much easier.

The property needed work, and it felt overwhelming. 

Then my mentor told me I needed to “zoom out” and ask myself two questions:

• Will it be worth more in 10 years?
• Will it cash flow enough to cover expenses in the meantime?

The answer was yes…and yes. That simple shift in perspective changed my approach to the project. And deciding to buy that property will end up making me over $1M.

Passive appreciation is not something I rely on, and I don’t recommend buying a non-cash flowing property and hoping the market will make you rich.

I do recommend choosing a market that is moving in the right direction and evaluating deals with realistic passive appreciation in mind.

I’ve heard the real estate market described as a yo-yo on an escalator. It goes up and down and up and down. But overall...it goes up.

Next week, we will wrap up the series with active appreciation, which is all about intentionally increasing income and value through improvements and smarter operations.

I love this way to make money in real estate (and specifically commercial real estate) because the possibilities for increasing ROI are endless.