For the majority of individuals, the amount of equity that they have in their homes and other real estate is the major component of their total net worth. In the past it was safe to expect that a property would simply increase in value as the years passed by, but today most homeowners are actively working to increase their home equity as a means of protecting their investment. With that in mind, let’s take a look at a few strategies that a homeowner can use to build their home equity over time.
The Easy Way: Paying Down Your Mortgage
If you are still paying down the first mortgage on your home – or if you took out a second one – this is the easiest place to start. Your home equity is directly tied to the amount that you owe on your mortgage since if you decided to sell you would be responsible for paying the mortgage loan off. Whether you make extra payments or decide to increase the amount that you’re paying each month, taking care of your mortgage as fast as possible is a good idea.
High-Impact Home Improvements
Another excellent way to increase the value of your home is by investing in upgrades and renovations. However, it’s important to remember that not all renovations are considered equal and some add little to the value of a home. Good starting points include adding an additional bathroom, improvements to the home’s energy efficiency, kitchen upgrades such as cabinets or counters, and upgrades that increase the home’s ‘curb appeal’.
Regular Home Maintenance Pays Dividends Later
Maintaining your home isn’t as exciting as renovating, but it is just as important in protecting your home equity. When you list your home for sale, interested buyers will see that your home undergoes inspection a number of times. If your home has been properly maintained throughout the years, the inspection process will reflect this and you are negotiating with buyers from a position of strength. On the other hand, if your home has been neglected and there are items that will require significant repairs in the near future buyers will use this information to try to reduce your asking price.
When You Sell, Work with a Professional Team
While having a high amount of equity in your home might look good on paper, it is somewhat meaningless if you have to provide discounts or lose out in the negotiation process when you sell. Working with a professional real estate team ensures that you will extract the maximum amount of equity from your home and property. Don’t try to go it alone – you may end up leaving a significant amount of money on the table.
Buying a home in a consistent real estate market like Raleigh provides the best chance that your home’s equity will increase over time. Contact Raleigh Cary Realty today and we’ll be happy to introduce you to some amazing properties for sale in Raleigh, Cary and the rest of the Triangle area.