Having a home you can call your own is perhaps one of the best feelings in the world. However, there is one word in the world of real estate that somehow brings a euphoric home owner back to earth, and that word is equity. It is the one word that reminds home owners that they only own the value of what they have already paid for the house against its fair market value. That means for a home that has been appraised for, say, $200,000 with the owner still owing $125,000.00 on its mortgage, the equity is $75,000, and that is what the home owner actually owns of his/her home.
Of course, the natural way to increase your equity would be to pay off the mortgage, but unless you have lots of cash lying around that will help you pay for it immediately, that would take a really long time. There are ways that you can create instant equity to your property, and making renovations on your home is at the top of that list.
Your renovation options
Now when we talk about renovations, it’s not really about knocking walls or putting expensive stuff like granite in the bathroom, although you can actually do both to create instant equity. If this is what you intend to do for renovations to create instant equity, talk to a person who knows real estate and have him/her look at the maximum price a heavily renovated home like the one you’re planning to get done would fetch. The moment you learn what that price is, you have to make sure that your renovation would exceed it, or getting money back out of the home will become harder.
Simple renovations will do the job
Doing major renovations to create instant equity is well and good, but you can also achieve the same thing through simple renovations. Even the simplest of renovations will still have a significant impact on the value of the property. Maybe you can just add a deck or outdoor area in the back yard. Replacing the carpets will also be great. Upgrading the light and plumbing fixtures to more efficient ones will get you there too. Come to think of it, even something as basic as repainting the walls or even the fence can help you create instant equity. For a rule of thumb on doing renovations to create instant equity, a good one would be to set getting back at least $1.00- $2.00 in value for every dollar you spend as a goal.
We at Tradebusters are in a position to help you achieve your goal of renovating to create instant equity. If you give us a call or complete our simple online form, we can help you find the best builders, plumbers, electricians or any tradie you might need for your renovation project.