The amount of equity you have in your home represents the monetary value of its worth, minus what you owe on the property. Every monthly mortgage payment reduces the amount of money that is owed, and increases the equity by at least that much. Over time, homes tend to appreciate in value, which also increases the amount of equity it contains.
By doing nothing, except letting the house age, you will likely be gaining equity in the house. However, there are significant home improvements that can be made to the home that can add equity to the home instantly.
Replacing a Roof
If you find that your roof is outdated, old, or beginning to fail, it is likely time for a replacement. Changing the roof is a quick way to add equity to the home, while helping to safeguard it from the outside elements. As one of the key components for keeping water outside of the home, it is necessary to replace the roof when required. As one of the more expensive home improvement projects, it is often required at the most unlikely time.
Changing out the A/C Unit
Air conditioning units are only designed to last a maximum of 15 years. Today’s HVAC units are much more efficient than the ones from just five or 10 years ago. When it is finally time to change it out, it is important to get a couple of bids from licensed contractors. This type of home improvement project can add tremendous equity to the home, because it reduces the amount of energy used to keep the interior cool.
Changing out the A/C unit is a great way to save money on monthly utility bills. Over time, it can help pay for itself in the amount of reduction of electricity it uses every month.
Painting the Exterior
When the paint finally fails on the exterior of the home, it can cause significant damage to the siding if not properly repaired. When the texture of the paint becomes dull or chalky, it is likely an indicator that it needs to be repaired. Hiring a professional is an easy solution for having the home exterior repainted. However, many homeowners choose to do this job on their own, saving thousands in the process.
A Room Addition
If there is need to have an additional room constructed on the home, the amount of cost involved will still add equity to the home. Many homeowners require an additional room because of a new addition to the family, or the need for a home office. With the right design, it is very easy to add a tremendous amount of equity to the home by constructing a new office or bedroom.
There are numerous available home improvement projects that can add a tremendous amount of equity to the house. Before spending any money, consider if the home improvement project is a necessity, or if it will add value to the structure. Only then will you know that you will receive a high level rate of return on your investment.
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