5 Ways to Turn Your Home Into an Asset, Not a Liability
Many homes are actually liabilities and not assets because they require regular financial expenditures to remain usable. Turning a home into an asset means lowering expenses and increasing income from the property so that there is some gain. It can also mean leveraging the value against investments or loans. There are five ways to turn a home into an asset and not a liability.
Increase the Value
One way to turn a house into an asset is to take steps to increase the value above the purchase price and the average rates in the area. This can be done in several ways. Adding features like professional landscaping, an attic bedroom or a hot tub will all increase value. Other options include modernizing the electrical system, upgrading the heating and cooling system and renovating the kitchen will have the same effect.
Another way to make a house an asset is to generate revenue. One of the easiest ways is to rent out extra rooms as apartments to people in the area. This can potentially bring in enough to cover mortgage payments so some liability is removed. Another option is to lease large properties for special events like weddings or family gatherings. This will also generate revenue and lower liability.
Borrow On Equity
A home becomes an asset when the equity is used to secure a loan. The Department of Veterans Affairs (VA) has special loan programs for homeowners who have served in the armed forces. Businesses like LowVARates.com specialize in these VA loans. The loans have adjustable rates, low interest and favorable repayment schedules. Sites like www.lowvarates.com can even be used for refinancing to reduce monthly liabilities. Homeowners can use the money to pay for property improvements or to lower other bills so more of the mortgage can be paid down.
Create a Business
A home can become an asset if part of it houses a business that generates money. This could be a workshop in the garage, a home office or a small growing area creating fresh fruits and vegetables for sale. The business adds value to the home while also producing revenue. Some businesses might even attract outside workers or entrepreneurs who want to lease the equipment.
Reduce Monthly Expenses
Liability can be reduced in a home by lowering monthly expenses for utilities and other bills. Low expenses make the home an asset. Some ways to do this is to modernize appliances, install solar panels or take other steps to reduce electricity bills. Reducing expenses provides more money to pay into the home until it is a fully owned asset.