So compounded over 27 years, the appreciation rate is more like 4.4%.  

Interest is compounded semi-annually, not in advance, but only on residential financing and then, not on all product types. 

When I came back stateside I got a job in Maryland with a major defense company.

Not only do you have many investors, would be investors mailing to them but you also have Realtors and Legal Defense Attorneys fighting for these leads.

It kinda gets me steamed to hear about companies that only deposit their match twice or even once a year because then you lose out on more potential compounding/growth of your account.

If you spend more cash than you get back in profit...you are losing money.In addition, you are losing the compounding effect of what you could get in added profits by investing with those funds you are spending by paying off the mortgage.

One will be amazed at what law of compound interest means over 20++ years. 

I would think that the pay down on principal and increase in appreciation would create a compounding return.What am I not seeing?

Apartments are different because the concentration of tenants increases the risks of ownership, there is a difference between someone who trips over a skateboard left on a step by a neighbor kid than by one left by your kid on the front porch.Insurance takes care of most risks, but not all, the risks not covered stem from your management and knowledge, which is the very best defense. 

The compounded effect of this over say 10 years with 10 sets of residents leads to a general beat up feel of a property that is typically 100 years old - hand made millwork, non standard door sizes, lath and plaster walls - all of this very, very expensive to restore or replace.