Categorized | Investing, Real Estate

Investing In Your Home For Long Term Gains


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Investing In Your Home For Long Term GainsBy

Why Investing In Your Home For Long Term Gains Make Sense

With fixed-income investments earning low rates of return below 3% per year, many investors are looking for alternative ways to invest their money safely for the long haul.  While it may not be the first thing you think of when looking for long term investments, investing in your home for long term gains can actually provide a decent rate of return over many years, well above the low rates of return being offered by fixed-income investments.

Case-Shiller housing data released in April 2013 indicated that the average price of homes in the United States increased approximately 7% compared to the same time in 2012.  This sharp increase in average home prices was coming off of years of housing price declines after the housing bubble burst in 2006; however, historical housing data indicates that housing prices increase by an average of 5% per year over the long run, when decades of data are taken into consideration.  If you plan on staying in your home for a long time, then investing in your home can be a good long term investment that beats fixed-income investing and provides the added benefit of making your home a more comfortable and modern place to live.

Investing In Your Home | The Best Ways To Invest

The following are some ideas regarding how to get the best bang for your buck when investing in your home.  Not all home improvements have the same return on investment when it comes time to sell a home, so consider making ones that will appeal to home buyers.

  • Improve the curb appeal of your home.  Real estate surveys have found prospective buyers immediately form a positive or negative opinion about a home based on the initial view of a home from the curb.  Improving curb appeal can include:  a new front door and/or garage door, new shrubs or landscaping, refurbished front steps and/or walkway, and a new paint job or siding.

 

  • Repaint the interior of your home.  One of the cheapest and most effective ways of increasing the value of your home is to repaint the interior to refresh the look of your home.  Avoid using exotic colors and designs, as this may turn off future home buyers.

 

  • Add storage space.  Storage space is not be a high profile home improvement, but many prospective buyers take into account how much storage space a home has before making an offer to buy.

 

  • Update hardware on doors and cabinets.  If the knobs and hinges on your doors and cabinets look like they are from another era, update them to give a modern look.  If the doors or cabinets need to be painted, use this as opportunity to give them a fresh new paint job.

 

  • Update the kitchen and bathrooms.  While kitchen and bathroom updates can be quite expensive and do not always provide the best return on investment, they may be worth doing if your kitchen and bathrooms are severely outdated and you plan on living in the home for a while.  Not only will you benefit from living in a home with a newly updated kitchen and bathrooms, but over time the investment may pay off as home prices appreciate.

 

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