Learn about house upgrades that can create serious equity for homeowners- even new buyers.

Guest Author: Walter E. Bennett

Looking to buy a new house? Or are you a desperate landlord, looking for ways to add value to your property increase?

If you belong to these two groups, you might be thinking of house upgrades that can increase its value. Contrary to what some people believe, upgrading your home can actually create serious equity for homeowners – even if you’re a new buyer.

So read on to learn more about how you can turn your house into a dream home.

What is Equity in Real Estate?

The variance between the market value of a property and its mortgage value is often referred to as the Equity of a property.  This equity can be an important factor while buying a property since it may provide some financial cushion in case of unexpected expenses. It can also play a vital role in setting up the bar for a good mortgage rate.

What Type of House Upgrades Increase Equity of a Property?

Making home improvements is a great way to increase your property’s value. It will not only make your home more comfortable to live in well being, but also raise the value of your property if you decide to sell it. If you’re looking to add equity to your home, here are ten improvements that you can make:

1. Invest in energy-efficient appliances: Energy-efficient appliances not only save you money on your utility bills but they also appeal to eco-conscious buyers. You should look for the energy-efficient label when purchasing new appliances.
2. Update your kitchen: One of the most attractive elements in a home is a well-designed kitchen. If yours is outdated or doesn’t function as well as you’d like it to, consider a kitchen remodel. Even something as simple as painting the cabinets or installing new hardware can give your kitchen a fresh, new look.
3. Upgrading HVAC Unit: Upgrading your HVAC unit can be a great way to add value and get top dollar for your property. Not only will an upgraded HVAC unit increase the comfort of your home, but it will also increase its resale value because buyers are always looking for homes that have a well-maintained HVAC unit. If your unit is old or in poor condition, it could definitely turn buyers off.

However, you also don’t want to overpay your HVAC system. A high-end unit might not be necessary, and it could even deter some buyers from looking for a more affordable home. Talk to your real estate agent about what type of HVAC unit would be a good investment for your home.

4. Add a bathroom: An extra bathroom is always a plus, especially if you only have one or two bathrooms in your home. It would be much better if you use the extra space in your home by installing a new bathroom.
5. Finish the basement: If you have an unfinished basement, finishing it can be a great way to add equity to your home. This extra space in the home can be turned into a work-from-home office or a storage space or even a guest bedroom. Just make sure that the space is well-insulated and has proper ventilation to avoid moisture problems.
6. Install hardwood floors: Hardwood floors are not only beautiful, but they’re also durable and easy to maintain. If your property doesn’t already have hardwood flooring, think about adding them to boost its value.
7. Replace old windows: Old, drafty windows can make your home feel uncomfortable and cost you more in energy bills. Replacing them with energy-efficient windows is a great way to improve the look of your home and save on your energy costs.
8. Paint the exterior: A fresh coat of paint may transform your home’s curb appeal. When choosing a color, be sure to consult with a professional painter or color expert to find a shade that will complement your home’s architecture and landscaping.
9. Add a deck or patio: A deck or patio is a terrific way to entertain visitors while enjoying the outdoors. Just be sure to get the necessary permissions and adhere to local construction rules.
10. Finish the basement. Adding more living space to your house by finishing a basement is a terrific way to do so. Basements can be turned into family rooms, home offices, or even rental units.

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4 Benefits of Increasing Equity in Property

1. Increased Financial Security: When you own a property, you have a tangible and valuable asset that you can later use as collateral for a bank loan or other financial aid. This can provide you with increased financial security and peace of mind.
2. Protection Against Inflation: Over time, inflation decreases the monetary value. However, the value of property tends to increase over time, protecting against inflation.
3. Steady Passive Income: When you rent out extra rooms of your house, you can generate passive income, which can help supplement your regular income. This can provide you with additional financial security in retirement or during financially distressing times when your regular income is not enough to support your living cost.
4. Potential Tax Deductions: Homeowners can often claim tax deductions for a variety of expenses related to their property, such as mortgage interest payments, repairs and maintenance, and property taxes. This can help reduce your overall tax bill and increase your financial security.

Conclusion

Upgrading your home can create serious equity for homeowners, even for new buyers. If you are looking to buy a home in the near future, be sure to keep these things in mind so that you can start on the right foot and increase your chances of building equity quickly.

About the Author:  Walter is Dallas based HVAC design and IAQ expert for homes and multi-storied buildings. Together with his brother, Kevin & friend, Sam Green, they founded a company that handles intricate HVAC design, air duct cleaning, ac unit installation, etc., in homes, offices, and commercial spaces all over Texas.