Can your house help you build wealth?
Can your house help you build wealth? The most obvious answer is ‘yes’; you can sell the property at a much higher price and use the money for investment and/or to buy another property. However, there are several other ways your house can help you build wealth.
4 Improvements which can increase your home equity
Here are 4 ways you can increase the value of your property.
- Attic bedroom – If possible, transform your attic into a bedroom; it will increase the count of bedrooms in your house.
- Additional bathroom – An additional bathroom, even if a half bathroom, can make it lucrative to the potential buyers.
- Update kitchen - If required, update your kitchen and make it look clean.
- Increase closet space – Make functional closets in your home in order to increase storage space.
However, think twice before making a luxury upgrade, since every improvement might not be lucrative to all potential buyers. Therefore, it is better to make those home improvements, which will have mass appeal so that there are more chances to get better return on investment.
3 Ways your house can help you build wealth
You can use your house to build wealth in the following 4 ways:
- Develop the habit of saving money - Developing the habit of saving money, is a bit difficult. You will be able to realize this better if every month you struggle to save a specific amount as per your budget plan. However, you need to build this habit if you want to build a secure financial future and deciding to buy a home will give you the required motivation. To buy a home, you’ll have to save a certain amount as down payment. So, start saving this amount from this month, even better, from today itself. Then, after making the down payment, you’ll have to save a certain amount to repay the loan on time in order to stay current on the mortgage loan. By developing this habit, you’ll notice yourself that saving money will become relatively easier for you. With time, you can increase the amount you save per month and walk towards building a secure financial future.
- Take out a home equity loan if required - No one can predict when you’ll be in urgent need of money. For example, you may be in need of sudden cash due to a financial emergency. In such a situation, you can tap your home equity to take out a home equity loan. This is a type of secured loan, which you can take out from a lender by pledging your home equity. Your home equity is actually the difference between the present worth of your home and how much you owe on the property. Home equity loans are relatively of low interest rate in comparison to credit card loans since the former is a secured loan. However, it is not advisable to tap your home equity to make your credit card payments. Regardless of whatever purpose you opt for a home equity loan, make sure you repay the loan on time so that you don’t lose your home.
- Give your house on rent – If you already have a house and decide to buy another one in a different locality, then you can give your present house on rent. It might also happen that you need to move to a different place for your job. In such a situation, and especially if you need to relocate fast and don’t have time to sell your property, you can give your present house on rent. It might also happen that you don’t want to sell your property right now. In such circumstances, you can use the money you get from rent to buy another property at your new location; or simply you can take a property on rent, at the new location, and use the amount to pay your rent.
Apart from above, you can use your house as your party venue if you wish. Just calculate how much you need to pay when you need to reserve a place for your children’s birthday or celebrating other special occasions. So, the basic idea is to maintain your house for financial gain in future years.
This article has been contributed by Miranda Owen. She is a contemporary financial writer and social media aficionado. She is an active participant in a number of personal finance communities. Her forte lies in sharing her thoughts in a pleasing and disarming style. As a result, she has successfully grown a large number of readers in a very small amount of time. She has written articles for several websites such as StackStreet, GeezerGuff and so on.