In the 2020s, millions of homeowners are searching for ways to get the maximum financial benefit from their equity. Some want to borrow against their property to buy land or a second home. Others wish to enhance the comfort of their living space or rent out extra bedrooms to generate additional income. It’s important to know the value of your home before making any serious decisions about whether to sell or upgrade it. Here are some pertinent details to keep in mind.
Be Real Estate Smart
Everyone knows that real estate investing is one of the most potentially rewarding ways to put money to work. But what about those who already own a house and want to leverage the built-up equity to take out a line of credit? Some people who are interested in the real estate market come across excellent deals that they want to take advantage of.
In many cases, the best way to purchase a second home or piece of raw land is to borrow against your current house to get the required funds. Taking out a HELOC (home equity line of credit) is a wise choice for those who want to tap financial resources in the form of equity. In addition to being a smart alternative to selling your house, you can get low-interest rates on borrowed funds. Of course, there are advantages and disadvantages to HELOCs. The way to begin is by reviewing a comprehensive guide that can help you decide whether a HELOC is the most suitable solution for your particular situation.
Get an Appraisal Done by an Expert
The same as you might hire a mortgage broker to help you through that process the same thinking applies here. Don’t rely on online estimates from real estate sites to calculate the value of your property. Instead, invest a modest sum in the services of an experienced appraiser. In fact, it can be to your advantage to get a detailed appraisal once per year. Then, should you decide to put the house on the market, you’ll be in a better position to set a realistic asking price that generates lots of attention and potential buyers.
Pay Attention to the Comfort Factor
Some get locked into the idea that every addition or improvement they make should contribute to the potential resale value of their property. Unfortunately, this way of thinking neglects the idea of being comfortable in the here and now. That’s why it can be a worthwhile move to add an above-ground pool, hot tub, deck, or barbecue pit simply because you want to enjoy your living space. Note that some comfort additions, like decks, can ramp up the resale value.
Know the Alternative to Downsizing
Older homeowners tend to think about moving to a smaller place after the kids are grown. The downsizing trend is real, and it comes into play for millions of people every year. However, there is a clever workaround for those who prefer to leverage the financial power of owning a home. Instead of moving to a smaller living space, like a condo or efficiency apartment, rent out those extra rooms and start earning rental income. Don’t worry about logistics and paperwork because there are several reputable agencies that can take care of finding vetted renters and posting the vacancy online. Renting is a viable and potentially lucrative alternative to downsizing.