It’s an achievement to own a property, but you don’t have the option of sitting back and enjoying your new home once you have the keys in your hand. Because of the huge costs involved in acquiring a property, you need to actively work towards protecting your investment. While most people have a basic understanding of how they can ensure their home’s value moves only in the right direction, there are a few potential slip-ups that could compromise the financial aspect of your home. We take a look at a few of these common risks below, so you can ensure that you don’t fall into their trap.
Unwise Upgrades
Some people have the idea that the more they spend on their home, the more it will be worth. They think that all upgrades are a good idea, and bring a healthy return; if you spend $20,000 on your home, it’ll add $40,000 to the value. This is not the cast. While there are plenty of upgrades that are financially smart and do add value to the property, there are many that don’t, and some that can actively hurt the value. A swimming pool might sound like a good idea, but no-one’s going to pay you extra for it when it comes time to sell.
Ignoring Essential Info
If you live in a house for long enough, then something will go wrong. It’s guaranteed! However, sometimes these things happen, and the property owner realizes that it’s going to cause a large financial headache. Why? Because of issues with their insurance. Some people go to make a claim, only to realize that they hadn’t paid attention to the insurance policy effective date and time, and that they aren’t covered. At other times, people think that they’re protected against one type of incident, but that, in fact, their policy didn’t cover them for that type of incident. It’s always important to read the essential information when it comes to your insurance before it’s too late.
Selling at the Wrong Time
The real estate market is notoriously volatile. An area that has a strong real estate market today may have problems further on down the line; there are no guarantees. As such, if you’re ever thinking about selling your home, it’s important to think about the timing. Now, you can’t always get things right: you might sell at a period just before the value’s jump up, for example. But by paying general attention to the house prices and the expert voices, you can determine whether it’s a good time for you to sell or not. The difference in home value can be gigantic when it comes to selling in a bubble period, or after the bubble has burst.
General Wear and Tear
Finally, keep in mind that it’s often the small things that have the biggest influence on a property’s value. Things like general wear and tear, outdated decor, and unkempt yard spaces will slowly but surely send your property’s value into a downward spiral.
