What term applies to a situation where an investor has achieved both mortgage pay down and property appreciation?

The situation where an investor experiences both mortgage pay down and property appreciation is correctly identified by the term "unrealized capital gain." This term refers to the increase in the value of a property that has not yet been sold. When a property appreciates, its market value increases, representing a potential profit; however, since the property is still owned and has not been sold, that profit remains unrealized until a sale occurs.

Additionally, as the mortgage is paid down, the owner builds equity in the property. Equity is the difference between the market value of the property and the amount owed on the mortgage. The combination of reduced debt and increased property value reflects financial growth for the investor without necessarily resulting in immediate cash flow or profits.

In contrast, "immediate profit" would apply only if the property were sold at a profit, and "cash flow" pertains to income generated from the property, such as rental income. Meanwhile, "net investment" typically refers to the amount invested after accounting for any returns or expenses, rather than specifically addressing appreciation and mortgage pay down.