What the twenty-year projection is actually claiming

Every listing carries a twenty-year projection, and the honest thing to say about it is that nobody knows what year nineteen looks like. So it is worth being precise about what the chart is and is not claiming.

It is four assumptions, compounded

• Rent growth. A percentage a year, applied to the current rent estimate.
• Expense growth. A percentage a year, applied to everything except the mortgage, because the mortgage is fixed and the rest is not.
• Appreciation. A percentage a year, applied to the value.
• Your loan. Fixed, and therefore the only line on the chart nobody has to guess at.

That is the whole model. There is no market cycle in it, no recession, no regional migration and no view about interest rates in 2034.

Which assumption matters most

Not the one people argue about. Appreciation is the headline and it changes the number at the end; expense growth relative to rent growth changes whether you can hold the property long enough to get there.

Rent growing 3% while expenses grow 3% is a property that pays the same in real terms for twenty years. Rent growing 3% while expenses grow 5% is a property that is losing money by year twelve, and the chart will show you which year.

The honest use of it

Not "this property will be worth $412,000". Rather:

1. Set the assumptions you actually believe.
2. Look at the year the lines cross, if they cross.
3. Compare two properties under one set of assumptions.

The third is the one the projection is genuinely good at. Both houses get the same guesses, so whatever separates them is the house and not the forecast.

Every one of the four is a field you can change, and every figure on the page moves when you do.