Posted under Home Renovation by user1 on Tuesday 14 February 2012 at 5:37 am

Home capital – Improve your home for capital not value

Until a couple of year ago, no-one really questioned the value in improving your home. A home capital improvement loan was seen as an unequivocally good thing. After all, property was a sure bet and if you improved your home, you’d make more in the value than you invested in the improvement – so it was a “no-brainer” right?

Wrong!
Home Capital
Let me explain. First off, there’s absolutely nothing wrong with improving your home and there’s also nothing wrong with taking out a loan to finance that improvement – unless you can’t really afford the loan and you’re doing it purely to increase the house’s value.

That’s what many people were doing just a few years ago – and it didn’t make any sense whatsoever unless they were going to be able to sell immediately the work was completed – then downsize. And even then, it was a little risky.

Otherwise, the only way a home improvement loan really makes sense financially is if the extra investment can create a little income. In this way, it’s home capital and so is real investment in the true sense of the word – as opposed to the kind of “faux” investment so many people refer to.

What this implies, then, is doing work on your home to create a space that can be let – or to get the whole house ready to rent out. N other words – to generate an income return on your investment rather than simply hoping it goes up in value by more than you spend. Unless, you’re a real developer and actually adding something real to the whole process.

Otherwise, do your home capital up to make it better for yourself in ways you can afford in the furniture sale or by picking up a little comfort in the sofa sales. At least you’ll be able to take these with you as opposed to the money supposedly “invested” in doing the place up that you may never see again in a falling market.

"Home capital : Improve your home" Tips to help you for finding the right home designers & home remodeling companies for your Home Renovation & Home renovations.


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