Selling Your Home? Maximise Your Profit and Escape Debt
The bard once said “neither a lender nor a borrower be”. Sorry Shakey, but you didn’t live through the credit crunch! While property is broadly considered to be a good investment, there are times when moving home to downsize or release equity are the best ways to rid ourselves of debt. Whether you’re a homeowner whose home is no longer their castle but a ball and chain keeping them from financial independence, or an investor who’s saddled with a money pit, we all want to maximise our profits when we sell.
For many of us, this is the difference between a huge step toward financial security and treading water for another decade, sacrificing life’s luxuries so that we can scrape together enough to survive. Here are some ways in which you can maximise your profit and take a bold step forwards.
Don’t be afraid to invest or borrow
Very often, improvements that you make will add more value to your property than they may cost to carry out. If you’re strapped for cash you may be reticent to carry out renovations at a home you don’t envisage staying in for much longer, but you should absolutely think of it as an investment rather than your average home improvement. Releasing equity or even considering homeowner personal loans should not be shied away from. Interest rates for home improvement loans tend to be reasonable and will have a higher monetary limit than a credit card. Plus, investing in renovations will increase your chances of selling quickly. This means that you will be able to avoid excessive interest charges with a lump sum repayment.
But which improvements maximise profit?
On average, home improvements add at least 10% to the value of a property, but some improvements are inherently more profitable than others. A conservatory, for example, can offer you a 108% return on your investment. An extension adds around 78% and new carpets average at around 50%. Besides the monetary benefits, they also make your house more appealing to buyers, which may result in numerous interested parties struggling to outbid each other to get their hands on your property. Depending on your circumstances, quick sale may trump a greater profit margin given the savings you’d make on mortgage or loan repayments.
Keeping costs down on home improvements
Although most home improvements offer a substantial return on your investment, if you can reduce the amount you initially invest then so much the better! It’s vitally important to keep costs down if you expect to maximise your profit, especially given the ceiling value of most properties. Low costs need not mean low quality when it comes to renovation.
In most cases it’s useful to buy more at lower costs. Investing in slightly more paint, fixtures or fittings than you need will ensure you get a better price and allow you spares when things go wrong (which they will). If you’re aiming for a retro or ‘shabby chic aesthetic then buying reclaimed items can add character to your home while keeping costs down.
Finally, remember that more expensive kitchen surfaces, cupboards and flooring may not necessarily result in profit.
If your house has ceased to be a home, then prudent investment and improvements can help you escape debt by maximising your profits.
