If you’re anything like the average homeowner then your house and property are one of the most valuable assets in your portfolio – and one that you would prefer to see increasing over time. In this post we’ll share four easy steps that will help ensure that your home equity increases over the long term.
Step 1: Pay off Your Mortgage
While there’s certainly nothing wrong with having a mortgage, if your goal is to improve your home equity you’ll need to retire your mortgage debt as quickly as possible. In short, equity is the difference between what your home could be realistically sold for today minus any debts that would need to be paid off after the sale. For example, if you have a five-bedroom home in La Jolla that could sell for $800,000 but you still owe $125,000 on a mortgage, you have $675,000 in equity. Every dollar that you use to reduce your mortgage debt is a dollar that you can in home equity, so taking care of your mortgage is an important first step.
Step 2: Invest in Renovations and Upgrades
Once your mortgage is paid off, your next step is to invest in value-adding upgrades and renovations. The right upgrades are those that will increase your home’s appeal to potential buyers and offer them something that other local real estate listings do not. The renovations that you undertake will be determined by factors such as the age of your home, its condition and your décor. If your home is relatively new you may find less value in redoing the kitchen and bathrooms than you would get by installing solar panels on the roof. Conversely, if your home is ten or twenty years old your main areas might require modernization with new appliances, counters and fixtures.
Step 3: Prevent Your Home from Decreasing in Value
Of course, investing in upgrades means little if you have problem areas that require attention. Step three is all about maintenance and keeping your home in its peak condition. The resale value of your home will drop significantly if during a home inspection a potential buyer discovers a major structural issue or that the roof needs replacement. Always take care of required home maintenance promptly and ensure that you have a quick inspection every few years to see if any new items have popped up.
The Final Step: Getting the Most Out When You Sell
So, you’ve worked hard to get the mortgage paid off, you’ve invested in value-adding upgrades and your home is in tip-top shape. The final step – and the most important – is selling your home to unlock all of the equity that you’ve added to it over the years. To get the best return on your investment you’ll need to leverage the expertise of real estate agents that understand the La Jolla real estate market and how to attract the interest of serious buyers.
When you’re ready to sell your La Jolla home, the team here at Berkshire Hathaway HomeServices California Properties is ready to help. Contact us today at (858) 405-4004 or by email on our quick contact form here.