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Improving Your Home’s Value

Buying a home is probably the largest purchase you will ever make. Home ownership can be one of the most valuable investments or one of the biggest liabilities you will ever have. So it’s important that you really consider every aspect before buying, so that once it’s yours, it becomes a great asset for you and your family. Obviously you want your property to build equity over the years so when you decide to sell, there will be a profit.

Home Value improvementsIn addition to equity, you as the homeowner can increase your property value by making indoor and outdoor improvements. This way, when you sell, you will get more out of your house. The key is to make improvements that are worth the cost. With a modest investment of your own time and some money, properties can become more attractive and lucrative in the long run. But the question is where do you get the money to make the improvements?

The ideal “dream” method of getting a house makeover would be to get on one of those home improvement shows. The cost to you is very low and you even get to be on TV. There is no harm in trying this method, applying usually only takes a few minutes, and you might receive your upgrades for a fraction of the actual cost. Of course if you aren’t accepted you will have to fall back on “Plan-B”. So if you can’t get your remodel  for free just how are you going to pay for it? The best way of course is if you’ve saved up enough in your “rainy day fund” or your home improvement fund. But making home improvements will often improve the value of your house as well so if you spend $10,000 on the right improvements they could result in an $8,000 increase in the value of your home. So the true cost is actually much less than the  out of pocket expenses. So there is some justification for considering a loan to cover the improvement costs.

Here are a few ways in which home upgrades can be financed:

Use Your Own Home

If you have equity in the home you are trying to improve, then taking out a home improvement loan on the house can create a positive feedback loop that will help you to increase your home value without actually having to spend any extra money. Depending on the appraisal value of the improvements, you can actually profit from this method. Have a talk with a reputable real estate expert and take a look online to see which upgrades will improve the value of the home the most. Often you will get the best interest rate on this type of loan as well.

Hidden Money

If you don’t want to take out another loan on the house itself, you may be able to use your other assets in order to improve your home. This is a great way to finance a project, especially if you have some extra assets that aren’t terribly important to you. It is amazing how much “stuff” you can find around the house including books, nicknacks, sporting equipment, unused vehicles etc. You can easily sell these through Amazon, eBay, or even Craig’s List.

Another way to find “hidden money” is through savings on routine expenses. Can you cut back on your monthly cable bill by reducing the extra channels? Or cancel magazine or newsletter subscriptions you don’t read?  An insurance company at St. John’s, Steers Insurance Limited, says you should also review your insurance policy annually to see if you can get a better deal. Remember any recurring expense is a potential saving review them all and I’m sure you will find some hidden money. And the best part is that it is not only interest free but also doesn’t have to be repaid!

Take out an Unsecured Loan

If you have the credit and the income, you may be able to finance your home upgrades through a credit cards. Depending on the type of upgrade you are looking to perform, this definitely beats wasting the money on impulse buys you will never even use. But this is the highest cost alternative since the interest rate will be much higher than a home improvement loan, so this option should be reserved for emergency repairs like a leaking roof or new water heater and not for things like a cosmetic kitchen upgrade.
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