Your home equity is something that can either have you jumping for joy or breaking down into tears. Put simply, equity is the difference between the current market value of your property and the outstanding mortgage balance that you still owe. Thus, if the value of your home has increased since it was purchased, your equity will have gone up. On the other hand, a decrease in the market (such as we’ve been seeing for the past several years) might leave you with no equity or even negative equity to deal with. As a homeowner, that’s not what you want. So, if you can’t trust the market to raise the value of your house, then you’re just going to have to take matters into your own hands. Here are three ways that you can build your home’s equity without having to wait for the market to get its act together.
1. Energy Efficiency
It’s probably no surprise to anyone in Australia that our electricity bill’s a bit too high. This can be blamed upon any number of factors or individuals, but the truth is that conventional means of producing power are expensive. In fact, we use peak electricity only about 40 hours total every year, but it still accounts for almost a fourth of our electricity bills! However, with some simple improvements, you can decrease your home’s energy costs while increasing its equity. A few quick additions such as thermal windows, better insulation, wood or propane furnaces, etc., won’t take up too much of your time or money and will really help cut back on how much energy you use throughout the year. If you really want to give the power company the boot, consider installing a set of solar panels to harness the free, limitless power from the center of our solar system. And speaking of green improvements to the home, a few low-flow plumbing fixtures can help save on ever-present water costs. Add these together, and you’ll have an attractive home with equity that’s through the roof (or, in the case of solar panels, on the roof).
If the value of your home is dropping, then you may need to consider improving the home itself in order to build equity. However, it can be difficult to know where your money can be put to best use. After all, you don’t want to blow $10,000 on an improved yard if the boost to your home’s value isn’t going to regain you that money. If you want to build your equity, the best improvements you can make are in remodeled kitchens and bathrooms. Simple renovations to your kitchen—such as new countertops or top-of-the-line appliances—can be quick to install, inexpensive, and make the rest of your home look a hundred times better. Likewise, bathrooms tend to take a beating as far as wear and tear goes. However, some new fixtures, a new tiled floor, or simply better lighting can all help raise the overall value of your home. Other projects, such as adding a deck or replacing your home’s siding can also be beneficial.
3. Home Automation
Home automation possibilities have really come into their own in the last few years. Where once an automated home may have meant annoying and complicated controls, unreliable systems, and a price tag that could kill a horse, modern options are far more desirable. As such, a properly implemented home automation system can do wonders for your home’s equity. It does this by hitting both of the major selling points of the previous two examples.
Want to reduce that energy bill? Automated lighting and climate control can be monitored and operated remotely from a personal smart device, meaning that you’ll never again have to worry about what things you may have left turned on before you ran out the door, and you’ll also be able to come home to a house that is the temperature you want it to be, without having to leave the furnace/air conditioning running the entire time you’re away. At the same time, simply having a number of intelligent and convenient systems wired throughout your house makes the home itself more attractive to most buyers. And lest we forget, automated home security beats the traditional deadbolt when it comes to keeping your property safe from intruders. All of these points together make a surefire way to increase your home’s equity. So, don’t sit around waiting for the market to sort itself out; improve your home today, and put the joy back into owning property.
David Glenn is a technology fanatic and business enthusiast who loves to keep up with the advancements in each. When he writes, he draws from his experience of over 30 years as a business owner and entrepreneur.