Anyone who has considered buying a home has heard that it is an investment. When you rent, the money you pay each month is simply used to let you use the property. As a homeowner, however, your payments build equity in the home that can benefit you if you refinance or sell the home.
There are many tricks that you can do to make the most of your investment in a home in Florida. Yes, you can simply live in the home for years and build a lot of equity, but why should that be the only way you benefit from this investment?
Let’s talk through some strategies to make the most of your homeownership in the Sunshine State.
Cash-Out Refinancing
As mentioned before, every mortgage payment you make is slowly reducing your loan balance, meaning you own more of the home every month. The value of this equity is not just useful when you decide to sell the home. You can leverage this equity by doing a cash-out refinance.
Essentially, you take out a new loan that is larger than the balance you own on the current mortgage. Then, the difference is paid to you in cash by the lender. Homeowners will use these funds for various reasons, such as paying off debt, making another big purchase, or investing in home improvement projects.
Home Improvement
Speaking of home improvement funded by a cash-out refinance, this is another strategy that allows you to take advantage of owning a home. When you make changes that add value to the property, its resale price increases. Some projects can earn up to 90% ROI such as a bathroom remodel or kitchen renovation.
When you sell the home, you will be able to earn even more from it if you have made improvements. If the scope of the project is large, you should consider hiring contractors to handle it. These professionals have studied hard and took prep courses to obtain a Florida general contractor license, so their skill sets will be more reliable than your DIY talents and they know how to manage multiple subcontractors.
Turn the Home Into a Rental
Real estate investment is a very lucrative strategy for building wealth. There are many routes you can take, and one of them is possible if you own a home in Florida. Preparing to rent out your property takes a lot of work, but the benefits can far outweigh the effort it requires.
If you have a separate living space, maybe on the second floor of your home, then it could be turned into an Airbnb, especially if you live in a popular travel destination. Additionally, if you have the funds, you could move out of your home into a new property and turn the first one into a rental.
This will generate income that can cover mortgage payments and then some if you live in a competitive market. Many people travel to Florida for the weather, so renting can be a huge moneymaker for you.
Pursue Efficiency
Energy efficiency is one of the hottest topics surrounding the real estate industry. Buyers want to see it in the homes they purchase and owners want to improve it in the homes they already live in. After all, an efficient home is a less expensive one to live in since utility bills are reduced. To improve your investment in a Florida home, consider making changes that foster greater efficiency. Buy smart appliances that use fewer resources to run. Install a smart thermostat that allows greater temperature control.
Invest in new HVAC systems that can heat or cool your home more effectively. Replace old windows with more efficient models. All these changes can lower your monthly costs, making it less expensive to own the home. Plus, they are appealing improvements for future buyers.
Keep Up With Maintenance
Homes appreciate over time as a general rule. However, this is not guaranteed, especially if you do not take good care of the property. To protect your investment and ensure that it will benefit you in the future, ongoing maintenance is necessary. Consult the inspection report from when you bought the home to note any concerns the inspector had about future issues.
Deal with needed repairs quickly to ensure they do not escalate and become more expensive. When elements in your home become outdated, fix them so the home is not compromised. Maintenance is a duty all homeowners have, and regular upkeep will ensure your property’s value continues to increase with time.
Florida is a Great Place to Live and Improve Your Finances
Owning a home in Florida is great because of the warm weather and amenities throughout the state, but the financial opportunities are numerous as well. As a homeowner, you have an investment that can improve your financial outlook at your fingertips. Big home projects and energy-efficient upgrades can increase the value of the property for future sale while also lowering monthly costs.
Turning your home into a rental can generate significant income, especially in a state where tourism is massive. Cash-out refinancing lets you use the equity you have to make purchases, pay off debt, or invest in improvements. Finally, your responsibility as a homeowner includes the need to keep up with maintenance to preserve appreciation. If you take one or more of these actions to heart, you will enjoy the financial benefits of homeownership in Florida.
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