Appreciation represents the increase in a property's market value over time and is one of the four primary ways real estate generates wealth (alongside cash flow, loan paydown, and tax benefits). Natural appreciation occurs from market forces like population growth, supply constraints, and inflation. Forced appreciation results from strategic improvements that increase the property's income or reduce expenses. Investors who target value-add deals rely heavily on forced appreciation by renovating units, improving management, or adding amenities. Both forms of appreciation build equity that can be leveraged for future acquisitions.