Making the most of your home as an asset: How to avoid losing Money

Mon, Mar 21, 2016

Financial Advice, Investment

Despite the words of some naysayers and economic doom-mongers, there is no doubt that an economic recovery has taken place since the great recession. The S & P Index as risen by more than 92% over the last five years, for example, and despite recently volatility the markets have driven widespread growth within the world’s economy.

With the rate of unemployment in the U.S having also fallen from 10% to 4.9% during the last eight years, the global economy has clearly enjoyed a renaissance. This may be about to come to an abrupt end, with a myriad of economic factors (including geo-political concerns and a manufacturing decline in China) pointing towards another bout of recession later this year.

 

How to optimise the value of your home as an asset

For home-owners in particular, this is of huge concern.  A global recession would certainly trigger a decline in housing values, causing many to become trapped in debt and negative equity. Those who are proactive can take steps to optimise the resale value in their home, however, as they look to place it on the market before economic prosperity begins to take hold.  Consider the following ideals: –

 

Avoid expensive and Illegal home improvements

While high-end home modifications such as adding a conservatory can deliver an estimate return in excess of $10,000, the average cost of construction is $10,750. This is a huge expense in a strained economy, especially when you consider that propety prices are likely to be squeezed in the event of a recession. This will diminish returns and may even leave you in debt, especially if you are forced to borrow money to complete the task at hand. Instead, you should focus on simple but cost-effective modifcations that are designed to improve the appeal of your house rather than adding monetayr value.

 

You myst also avoid illegal modifcations too, as completing large-scale structural projects without the necessary permission can cost you huge amounts of money.

Invest in Curb Appeal and attend to external maintenance needs

It is estimated that aspiring buyers form an impression of your home within seven seconds of viewing it, so the need to invest in curb appeal remains crucial if you are optimise the value in your home. The Halifax bank in the UK estimates that having an unkempt or damaged home exterior can reduce the value of a property by up to 5%, which may prove crucial during times of economic austerity.

Interestingly, this can also impact on the relationship with your neighbours, as individuals are more sensitive to their finances during a recession. Having an unkempt home can also impact on the property prices of surrounding structures, so this is something to avoid at all costs.

 

Present your home as a neutral and welcoming space

If you decide to sell your home as a proactive measure to optimise resale value, you will need to think long and hard about how you achieve this. By presenting your home a persoanlised space that reflects your unique persona, for example, you run the risk of alientating some tastes, deterring buyers and forcing others to lower their bids due to the amount of work and remodelling required.

Homes with unusual colour combinations and personalised art must be modernised to create a neutral and warm environment, while pet odours and controversial design features must also be eradicated. It is also important to stimulate buyer’s minds by removing clutter and optimising the illusion of space, initially by reselling old and unwanted technology and investing in compact, multi-purpose furniture.

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