When it comes to investing in a family home, there’s one word that comes to mind for the financially minded homeowner: equity. Simply put, the more equity you have in your home, the more it’s worth. That equity will serve you well in your retirement years, especially if you plan on applying for a reverse mortgage.
2022 has been a banner year for reverse mortgages and there’s a good reason why: inflation. The loan can put hundreds of thousands of dollars in your pockets which you can then spend on home renovations, maintenance, and other improvements which will increase your equity all the more.
If you’re 62 or older and have been paying religiously on your mortgage for decades, you are the ideal candidate for a reverse mortgage. If approved, you will receive proceeds that can run into the high six figures. You can take your proceeds in one lump sum, or as a line or credit, or in equal monthly disbursements.
You never have to pay your reverser mortgage back until you die, or you leave your home. To find out how much of a reverse mortgage you qualify for, you can use an online reverse mortgage calculator.
But what projects can you engage in to increase the equity in your home now, if retirement is still ten or more years out? According to a recent report by Moving.com, home improvements and renovations not only build instant equity in your home, but they improve the quality of your life.
It’s important to plan when you decide on what exactly you wish to renovate in your home. Choosing the right projects can afford significant value to your home, but the wrong projects will be a waste of cash. For instance, if you are looking for a way to add instant value and equity to your home, you’ll want to look at its curb appeal, plus inspect crucial rooms that have become outdated such as the kitchen.
That said, here are some home renovations that equate to increased equity.
Improved Landscaping
Says Moving.com, almost all potential home buyers look for houses that possess excellent curb appeal. You can work on creating a great and highly functional interior, but without appealing landscaping and a striking front exterior, most buyers will pass the house by and never look back.
On the other hand, Money Crashers recently stated that going too far with your landscaping by adding strange looking and expensive plants, plus fountains and strange sculptures, won’t result in added value to your home. It’s best to impress buyers with a well landscaped green lawn that resembles a golf course, some subtle but well-placed shrubbery, and also some small trees.
New Energy efficient windows
Now that the U.S. has given up on energy independence, you’re all paying far more to keep your house warm during the winter months, and cool during the hot months. One simple fix is to invest in new energy efficient windows. These will automatically increase the equity in your home while decreasing your energy bills.
Keep in mind, new window replacement is not a cheap affair, but will save money down the road. They are engineered to keep your home comfortable no matter the season. Money Crashers stated that by replacing old windows with brand new energy-efficient models, you can save upwards of $500 per year in cooling and heating expenditures.
New Bathroom Renovations
New good looking and fully functional bathroom renovations are a must have for attracting buyers to your home. Bathrooms are used several times per day by the entire family, and therefore renovating them is considered worth the investment since it can add significant value to your property.
A new bathroom renovation will cost around $30,000 in 2022 money. But when homeowners decide to sell, their return on investment (ROI) should be about 67 percent. You can work with the design professionals at your local Home Depot or Lowes to put together a new bathroom renovation that will not only fit your budget but will look stunning.
New Kitchen Renovations
Considered one of the most important rooms you can renovate to add immediate equity to your property, a new kitchen renovation is worth its weight in gold. You can remodel your kitchen on a more affordable basis or you can spend a good amount of money on a comprehensive rebuild. Some of the costs will depend on the appliances and the finishes you go with.
No matter how you go about it, kitchen renovations are never inexpensive, but you don’t have to go broke by entering the project either. If you choose to move some non-bearing walls, while going with high-end marble countertops, designer cabinets and backsplashes, new flooring and wall finishes, plus an island that contains its own sink, you can plan on spending at least $100,000.
The ROI on this expensive kitchen remodel is high. However, since your home’s value can’t help but be significantly increased, it will be worth every penny,