Capital Growth

Cash Flow Before Taxes
+
Principal Reduction
+
Tax Benefits (depreciation/interest)
+
Appreciation
/  (divided by)
Capital Invested (downpayment + closing costs)
=
Capital Growth

Or Return on Investment, if you will.  Now to me, I like to make sure my returns are satisfactory and that the rental property will be self-sustaining without adding in the Apprecaition. 

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