Buying a home is a great long-term investment. Here’s why it’s important to own one for at least five years.
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There’s this crazy thing out there called the “five-year home sale rule.” Should you care about it?
If you’re thinking about buying and/or selling a home in the near future, you definitely should. The five-year rule is more of a rule of thumb that can help you decide whether you should purchase a home in the first place.
When you buy a home, you should plan to stay there for at least five years because it takes that long to recoup the expenses that you used to buy the home in the first place, allowing you to at least break even on your investment. If you don’t stay long enough, it could cost you a lot more to buy.
Staying in the home for longer than five years is ideal.
You have money tied up in any home you buy and it takes a while for appreciation rates to catch up. If you spent 10% or 15% down, it will probably take you three to five years to recover at our current appreciation rate of 3% to 5% per year. There are selling costs too, so staying in the home for longer than five years is ideal.
In my world, the five-year home sale rule is something you should always think about before you buy and sell.
If you’ve been in your home for seven to 10 years already, you’re in the sweet spot right now where you have a little extra equity and can pull it out to buy something bigger and better, or even downsize.
If you have any questions about the current state of the market, don’t hesitate to reach out via phone or email today. I look forward to hearing from you soon.
