3 Ways You Can Use Your Home to Build Wealth
Guest Post by Martin William
Ever wondered whether your home can bring you wealth? . . . . The answer is a definite yes.
If determined enough, your home can actually bring you wealth by taking advantage of the various opportunities there are.
Buying a home was for a very long time considered the best way to go due to its return on investment abilities, as compared to renting.
Real estate business will always remain one business that hardly depreciates in value and if you are determined to make some cash over time, follow these top 3 ways and you will live to thank your home for taking care of you.
Rent out your extra rooms
This has been a very common method of many home owners to get the extra cash out of their homes. On can easily rent out their basement or even a ‘Granny Flat’.
If they are not independent of the main house, it might be time to make those arrangements. Have the either the basement / ‘Granny Flat’, renovated and furnished to look presentable.
Advertise them out for renting and you will be getting a clean income after every month without having invested much on it.
Depending on the rates of your place of residence, you will be able to determine how much the rent will be.
Business With a Caveat Loan
To most of you, this might be a fairly new terminology.
A caveat loan can simply be described as leverage or collateral. In the case, a lender gives you money for your own use then places a caveat on your property’s ownership title.
This prevents you from selling your property before the money has been paid back and that you cannot secure any other type of loan until you clear your debt.
A caveat is bound by law and it doesn’t necessarily mean that the lender is now in charge of your property but they have an interest in it. The lender is mandated by law to liquidate the property should you default that caveat.
If you have a great business idea, have performed market research and know you can fulfill the needs of customers, then this could be a great financial vehicle to use.
Caveat lending company Maxiron Capital, say they allow “clients to borrow up to 100% of its Loan to Value Ratio (LVR), within just 24 hours.
LVR is a percentage that is calculated by dividing the loan amount being borrowed to the value of the property that the applicant is using as security.
In simpler terms, Max Funding allows its clients to borrow up to 100% of their property value”.
This is definitely going to work for you if you have clearly set goals and once you have cleared the repayment, you are viable of taking another caveat to either improve your business or to venture into other businesses.
Build on equity
Owning a home, unlike renting it out, will bring you tangible equity that will enable you to call it upon when you require it.
If you pay more on your home, the more money you will have built up as equity. In layman terms, a home equity is the interest of the homeowner in a home.
When one took a mortgage to buy the house, their equity increases when whatever remained of the mortgage loan is paid down or whenever the value of the property increases.
There are several common ways you can use your home equity to create more wealth for yourself including; buying your next home, borrowing against the equity or using it to fund for your retirement.
Many home owners have little or no idea that they can actually make money from their homes without necessarily having to sell them.
Now get busy making money!