If you’re lucky enough to own your home, then a significant portion of your wealth might be stored in that property. Getting the best from that investment often involves making improvements to the building, and financing those improvements in the right way.
Let’s take a look at where the value of a home stems from, and what can be done to raise that value.
Understanding Your Home’s Current Value and Equity
To begin with, it’s worth understanding exactly how much your property is really worth. This can be done using online tools of the kind provided by property marketplaces like Zoopla and Rightmove. You can also look at broader trends in house prices across the region, or the entire country. It’s also a good idea to look at the value of the house when you bought it, and what upgrades you have made since then.
It’s difficult to say with certainty what your house is worth, but a rough estimate might be considerably more useful than no estimate at all.
Considering Homeowner Loans for Larger Projects
Larger projects might be justified by the increase in value they bring about. But if you don’t have the necessary cash to hand, this increase might be forever beyond your reach.
This is where debt can be worthwhile. You’ll need to consider the repayment period, the overall amount you’ll pay in interest, and the potential risk of default. Secured loans, and specialised homeowner loans, tend to be a great option. Just make sure that you enter into the debt in full knowledge of the potential consequences.
Smart Home Improvements That Add Value
Certain home improvements can add substantial value to your property. Others might add very little. Some can even make your property less appealing to would-be buyers.
The most cost-effective improvements tend to relate to the kitchen and bathroom, which are viewed by most buyers as essential. Other improvements, like new boilers, insulation, and solar panels, might be safe bets. What’s important is that you factor in the existing property, and the expectations of buyers. Look for low-hanging fruit, and don’t invest heavily in features that might ultimately be overkill.
Exploring Equity Release Schemes for Later Life
As you approach later life, you might be looking for extra disposable income to put towards holidays. One option is to sell the house, and move to a smaller one. This practice, known as ‘downsizing’, is great for homes that feel big and empty after the kids have moved out.
Equity release schemes are another popular option. They allow you to access some of the value tied up in your property, without having to sell it.
Renting Out Space: Maximising Underutilised Areas
If there’s a part of your home that you aren’t getting any use from, then you might decide to annexe it and rent it out for passive income. This is often a good option in large, multi-storey townhouses, where privacy is built in. For this to be profitable, you’ll need to consider all of your obligations and duties as a landlord, and all the costs you’ll incur as you comply with the latest regulations.