This article is for general information purposes only and reflects the state of information at the time of publication. It is not legal or financial advice. Always seek professional advice tailored to your specific circumstances before making decisions.
Markets rise and fall over time, which can affect the value of your property. However, ensuring that you continue to improve your equity position will have a positive impact on your wealth. Here are some tips on how you can grow the equity in your property.
What Is Equity
In the realm of property ownership, equity is the value of the property, less any debts that are owed in respect of it. As you pay your mortgage, you increase the equity in your property. Similarly, if the value of the property increases, so does your equity.
Option 1 – Debt-less
Obviously, if you have no loan over the property then the entire value of it is your equity. That is not achievable for many of us, but don’t forget the value of time. Speak to your mortgage provider about:
- using an offset account
- making small regular additional payments
- making a lump sum additional repayment
- fixing interest, or getting a better rate
and watch your equity grow over the coming years.
Also, if you’re a property investor that is negatively geared, speak to your tax advisor before you take aim at reducing the mortgage.
Option 2 – Sweat Equity
Sweat equity is as obvious as it sounds – it’s the equity you can create by putting your own effort into the property. Depending on your skill level, there are many property improvement projects that you can do yourself, saving on tradespeople costs and maximising your property’s value.
Highlight great features
This could be lighting around the pool, window coverings, or an entrance pathway.
Upgrade the garden
A well-kept garden with mature plants is a deciding factor for many home buyers. If you need some tips, check out our post on garden makeovers.
Modernise kitchens and bathrooms
The kitchen is often a tipping point for buyers. Adding appliances, a fresh coat of paint, or new benchtops can tip the balance in your favour. Similarly, bathrooms may need cracked or stained basins replaced, fresh paint, and possibly new tiles.
Option 3 – Serious Renovations
With accommodation at a premium in Australia, additional living spaces have become a major focus for buyers. While these options will require professionals, they have proven effective in increasing the value of your home.
Add a granny flat
An additional living space, especially if self-contained, is highly sought after by Australian buyers. These spaces are useful for growing teenagers or assisting older relatives who need care.
Build outdoor entertaining areas
A functional and beautiful outdoor area that flows from the main residence is highly regarded and can help you achieve a premium on value.
Roof restoration
Street appeal depends on many factors like gardening, painting, and pathways. Don’t forget the roof – replacing broken tiles or sheets and repainting can lift your property’s appearance and keep buyers interested.
Combining a few of these options can make a dramatic difference to your property’s equity, and many are simple to achieve. Bliss Conveyancing has a large network of property professionals, so please reach out if you would like further information.
