Simply put, appreciation is how much value your house gains over time, or the opposite of depreciation. As a simple example, a $200,000 home today that is worth $250,000 in 5 years has had $50,000 of appreciation. Calculating appreciation can be very complicated as many factors can play a role in appreciation. If the home is in a good neighborhood and is kept up to date, it will likely appreciate much better than a home in a bad part of town that has fallen into a state of disrepair. However, these are not the only to factors that play a role in appreciation. There are many more including, but not limited to, the age of the neighbors, location, schools in the area, the size of the town, and the size of the house.