Building Equity with a Home Improvement Plan
Your home is typically the largest financial investment you’ll ever make. Over time, we expect the equity to increase through increasing property values and a decreasing mortgage balance. While homeowners recognize the need to maintain the home in good condition, one of the best ways to maximize your home equity is to create a plan for ongoing improvements and updates.
Often the interest in a remodeling project results from either an unexpected windfall or financing for a specific project, but by planning for ongoing improvements, any homeowner can engage in updates to stay current with market trends.
As tastes change, homebuyers are attracted to new features. Outdoor kitchens, great room configurations, and home offices are just a few of the trends from the past few years. More timeless desires include more square feet, chef’s kitchens, and spacious bathrooms. To stay ahead of trends and build equity, smart homeowners should build a plan for continuous improvements.
In addition to developing a fund, build a road map for upgrades and enhancements. Consider the life span of major systems, such as the roof or HVAC systems; is end-of-life a good time to switch to solar energy? Kitchen styles change dramatically every 10 years on average. Start saving for a kitchen style change on the same schedule. It can be a complete remodel or simply a new countertop.
You may not plan to sell your home for years, but things change. No one wants to consider listing a home that is outdated; subsequently, taking the financial hit that comes with it. Now is the time to plan for regular updates to build equity while enjoying the benefits of the changes, too.