Making Ends Meet

Ways To Build Equity In Real Estate

26 June 2017

Judy Gomez

It can be risky trying to invest your money. You need to find something that gives you a good return on your investment, and that is not too risky. One of the best things to invest in is real estate. Many people do not consider a home as a way to make money, but by purchasing a home you will be building equity. To calculate home equity, subtract any outstanding loan balances from the property's market value. Many individuals do not know that they are slowly building equity in their home, but the rate at which you build equity can be increased. Here are a few ways to build equity in your home.

Home Improvements

One way that you can increase the amount of equity in your home is by increasing the overall market value of the home. A easy way to increase the value of your home is to make home improvements. If you are looking to gain equity in your home, you should consider what the resale value of the home is going to be. Improvements such as a remodeled kitchen, a remodeled bathroom, or an exterior face lift can really add market value to the home. With the market value of your home increasing, you will be building equity at a much faster rate. 

The Payment

There are different types of loans that you can get for your home, but one way to build equity quicker is to make a larger than necessary payment on the home. If you are paying down the amount of the loan at a faster rate, then you are going to owe less on the home, but still be building market value with the home. So, if you pay off more of the loan and sell the home for more money, then you are going to be able to pocket more cash. Do not spread yourself too thin by paying extra on your house payment, but even an extra $100 a month is $1,200 a year. A local checking services company may be able to help you work out your additional payments.

Neighborhood

Often forgotten about is the value of your home compared to the neighborhood. The neighborhood that your home is in is going to affect the value of the home tremendously. Nobody wants to live in an ugly neighborhood. Talk to your neighbors and start having equity parties. This will improve the value of your home, but it is also going to improve the value of every single home in the neighborhood. Even cleaning and doing a little bit of landscape to give the neighborhood more curb appeal can drastically increase value in the neighborhood.

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