While we may not always be able to anticipate when we need to sell, I generally advise to my clients before they plan on buying, that they commit to owning the property for at lease 3 to 5 years. Here in San Diego, that is generally the amount of time to gain enough appreciation to cover closing costs, so that you’re not at a loss when selling. These costs include agent commissions, mortgage fees, and other transaction expenses. You can build equity in several ways: through a larger down payment, regular or extra mortgage payments, home improvements, and natural appreciation. Obviously in some cases, the ROI after 5 years is far beyond that, but overall this timeframe is a safe bet.

When you buy a primary residence, you benefit from numerous perks—if you occupy your home long enough.

Not only can you get tax breaks for the mortgage interest you pay—up to $750,000 of debt if you bought after 2017—you can avoid paying capital gains on your home when you sell—up to $500,000 for married joint filers and $250,000 for singles. But you must have lived in the home for two out of five years as your primary residence.

To estimate your equity, contact me directly for a market value analysis. Then simply subtract what you owe from your home’s current value.

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