How one homeowner has gained $2,000,000 equity

For most people who live in high-price-home states that offer strong jobs and population growth, being a homeowner in those areas is a great choice, because home prices increase due to the demand for housing.    Read to the end and you will find the answer to why I lost a $2 million possible gain to my net worth and how the next homeowner, who purchased my previous primary home, gained $2 million. Here are a few key benefits for being a homeowner based on my own 2 decades of experience as a homeowner and investor.

5 key benefits of being a homeowner:

1. The American dream

The house is MY home, so I get to do whatever I want with it. For example, I can change the paint color of my house without having to ask the landlord for their approval.   I can choose the best city to raise my children, so they will enjoy the best school district, where they will receive a good foundation from their education.

2. Peace of mind

Being a homeowner leads to peace of mind, with stable and predictable housing costs.   I can lock in a 30-year fixed mortgage and know my mortgage payment is constant as long as I am living there. 
I like to plan for my current, and ultimately my future finance. When I know my actual housing expense, it makes this process much easier.  Housing cost takes up roughly 20-30% of overall income, so knowing it’s constant allows me to plan for the future better.

3. Tax deduction

I can deduct my interest mortgage payment from my taxable income, ultimately reducing my taxes.

4. Build equity

When I make a mortgage payment, there is a portion that will pay down the loan balance, in turn, the longer I stay in the home, the more equity I have in that house.   

5. Capture property appreciation
   When you live in your home over a long period, you will also gain equity from the appreciation. You can expect the average appreciation to be 2-3 percent in a normalized market.    What we’re experiencing right now is different than other past years, and appreciation is roughly double what it usually is!   Of course, I will take the 5% increase in property value anytime.  Who wouldn’t? 😊.

Now let’s talk about my old primary home.

We bought this home for 1.2Millions in 2001 and sold it for $1.5Million in 2005. 
My husband and I gained about $200K from this home and did not pay the capital tax for it because as joint homeowners, we can have up to $500K capital gain on our primary home without paying the capital gain tax.     We visited California a few years ago, and took our oldest son, who lived the first two years of his life there,  to see our old home.

As of today, the property is valued at $3.4 Million!!

It’s wonderful that the current homeowner gained $2 million just by living there for 16 years.    Looking back now, I wish I did not sell it. 

A $2,000,000 gain over 16 years; that is $125,000 per year added to their net worth for 16 years straight.

They added 6 figures to their net worth EACH YEAR just being a homeowner on top of other homeowners’ benefits that I shared earlier.


I am sure that they also paid for some expenditures during these years, like replacing a new roof, flooring, and remodeling the kitchen and bathrooms.  So let say, they spent $200K total for all these items.  In the end, they still gain $1.8 Million. 

As you can see, it’s not too bad to be a homeowner, plus you can add seven figures to your net worth.

Why does this city have high price homes?  
Here are a few of the main reasons for it.


Reason #1:  This city has very strong job and population growth.     This city attracts highly paid professionals, and for this zip code specifically, the median income is in the range of $180K per year.

The median home price is $1,000,000

Reason #2:
This home has one of the best high school ratings in Northern California.  
Most high-income professionals like to send their children to the highest-rated school.  This HS won a lot of awards in CA. I remember this because I researched school ratings when we moved so our children could go to the best school district.

This city is Cupertino, California.   Apple’s headquarters are located here and this city is just a short drive to many other high-tech companies.   High tech careers pay well, and this neighborhood area attracts high pay professionals. 

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Here’re a few MAIN points that you can take away from this video.

The city that you choose to invest in should have some of these key factors:

1. Steady job and population growth
Make sure the median income will support the rental price that you offer

2. Decent school rating
If you want to serve tenants who prefer a good school rating for their children, then select the area that offers it. 

3. Healthy and diverse companies within 30 min drive
This helps to reduce the property’s vacancy rate because once a tenant moves out, you will have other professional tenants move in.

4. Low crime area
Good tenants are attracted to a safe environment for their families. When the property increases or declines in value due to economic environments, the area should hold its value well and bounce back faster than less desirable areas.

5. Have Time in the Market - Remember that it takes some time to build wealth with real estate.    It took 20 years for this property to double its value.  

Real estate is local.    Some areas can and will be better than others.   You need to spend time doing some research about the area that you like to buy, so you can make informed decisions.

If you’re a homeowner already, share your thoughts below, as well as your experience as a homeowner, we all want to hear from you.   I hope that maybe you have gained as much as 2 million on your primary home like this homeowner.