How to Calculate Equity in Your Rental Property

Equity is what you actually OWN - the difference between your property's value and what you owe. It grows every month through mortgage payments and market appreciation, and it's the number that determines your net worth as a landlord.

The Formula

Equity = Current Market Value - Remaining Mortgage Balance

Real-World Example

Purchase price: $350,000. Down payment: $70,000. Initial equity: $70,000. After 3 years: property value is $385,000 (3% annual appreciation). Mortgage balance: $255,000 (from $280,000). Current equity: $385,000 - $255,000 = $130,000. Your $70,000 nearly doubled in 3 years.

The Bottom Line

Track equity across ALL your properties. Your total portfolio equity is the single most important number for your financial health. Mozongi REMA shows the Accounting Equation (Assets - Debt = Equity) on every property and at the portfolio level.