Mandy Moore — who, quite frankly, we can't think about without humming the chorus to "Candy" — has sold her long-time home in L.A. for just under $3 million. Moore purchased the Mediterranean-style abode 14 years ago for a mere $1.7 million. The 5-bedroom, 5-bathroom estate in L.A.'s super-hip Los Feliz neighborhood rests on a secluded lot and boasts its own zen garden. The listing is still up on Trulia, and can we just say....
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So, can you expect your home to appreciate like Mandy's?
Well...maybe, maybe not. The average home appreciates at a rate of about 5.5% per year. So that $100,000 home you purchased last year is probably now worth $105,000. Mandy's annual rate of return was a little under 5%.
A home's "value" is only what a person will actually pay for it, so appraisals and appreciation estimations are at best a guessing game - but the people who run these numbers are very, very good at guessing. That 5.5% annual rate of return is almost a sure thing for most of us.
When you purchase a home, you are probably spending the most money you'll ever spend all at one time. It's not a situation to enter lightly. If you're doing it purely for profit, be warned - some homes do lose value, bubbles do burst, neighborhoods do deteriorate. But that's all so unpredictable!
Good advice: Only buy what you can afford, insure everything, and make investments outside of your property.
Images: Kevin Winter via Getty Images; Trulia.com