If you’re like a lot of long-time homeowners, you’ve probably got a great deal of home equity on your hands right now. If you’ve been considering putting it to work, it’s still a decent time to take out a second mortgage or a HELOC (Home Equity Line Of Credit), even as rates are starting to rise. Having so much home equity can enable you to make some very seriously needed changes to your home, either to allow you to age-in-place or to accommodate other lifestyle needs. It’s an opportunity to make major changes or upgrades, but there are certainly some ways that are better than others to use your home’s equity. We’ve got some ideas to get you started.
Freshen Up the Whole Place
There’s nothing better for the value of a house that’s not had much regular care in a while than a general sprucing up. You’ll have to go room by room, as well as take a hard look at your exterior space, to decide which items are tired and in need of repair or replacement. You’d be surprised how much difference some careful clean-up and maintenance work can really make.
A few common exterior items that can really make a tired house look brand new include a new garage door (for houses with street-facing garages), exterior window dressing such as window boxes or updated shutters, tuckpointing for brick homes, or cleaning and resealing your driveway. Interior items that can make a huge impact house-wide include new floor coverings or refinished floors, updated room lighting and under cabinet lighting in kitchens and baths, and a fresh coat of interior paint.
Consider Major Outdoor Upgrades
According to Remodeling Magazine, something simple like adding a wooden deck to your home can improve your home’s value and return as much as 65% of the cost back to you if you were to sell right away. Outdoor living spaces have become all the rage since the pandemic has made vacationing challenging, so it could also be an addition your family would use a lot.
Upgrading your landscaping can also add a lot of curb appeal to the front of your home, which would help if you decided to sell. You could even use your home’s equity to add landscaping that’s far easier to care for than what you have now, like xeriscape plants that require little water or intervention, or simply a better planned landscape that minimizes the need for mowing your lawn.
Make Your Bathroom or Kitchen Universal
Aging in place is becoming a more common goal for people as they age. They want to be in their own homes, and these kinds of upgrades make it possible by creating spaces that will allow for walkers, wheelchairs, and other support tools. Universal bathrooms and kitchens can be amazing ways to use your home’s equity. Universal bathrooms may need wheel-in showers, sinks that are table height, bidets and other sanitary plumbing installed, or even just simple changes like non-slip flooring and better storage added.
Universal kitchens are a bit more involved, often involving sinks, appliances, and workspaces being lowered to a height that can be used by people in wheelchairs or those who simply can’t stand for long periods on hard floors. Better task lighting, more accessible storage in cabinets and other areas, and non-slip tile are also important parts of universal kitchen design.
Purchase An Investment Property
If you have been in your home more than 5 years you can use your equity to buy an investment property. Southern California has a very competitive and high rental market right now which you can take advantage of. Developing passive income may also help you get to your retirement goals sooner. Call your local real estate agent and they can give you some information on what neighborhoods to be looking in and also what rental rates are for a specific area. This will help you to make the best decision for the money you are going to spend.