Inflation will not necessarily set the appreciation rate (see what is happening in California). The 4% appreciation rate is a “safe” bet number that you can count on and use for preliminary calculations. I have some faith that the Alabama market will do more than 4%, but I will only anticipate 4%. We have had numerous discussions here saying that housing only goes up as far as inflation, but putting in a number higher than 4% for Alabama is asking for trouble and makes the properties there look better than they actually are. If I revisit the property a year from now and it has gone up in value 8%, great, but I am not counting on it.
