One of the biggest advantages of owning your own home, aside from not having to pay rent, is the ability to grow and access the equity in your property. But knowing how much your property is worth comes down to several factors that most homeowners aren’t aware of. To help you answer ‘what’s my property worth?’ Darren Walters has put together this article covering everything you need to know about calculating the value of your home and accessing your equity.
How to Assess Your Property’s Value
There are a few ways you can assess your property’s value. The simplest method is to use a free online assessment to get an estimated value range. These are usually based on property sales and data from major websites or companies. This means they can be inaccurate if your area doesn’t have a lot of houses on the market. Or if your home is substantially different to others in the region.
However, they’re a great tool if you’re just interested or want a rough idea of what your home might be worth.
Sarah & Alan – Happy Homeowners since 2020
Dean – Happy Homeowner since 2020
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If you’re looking for a more accurate figure, you’ll want a professional home valuation done. These do cost a fee, which will vary between providers, but they’ll give you a more accurate figure.
Finally, banks have their own property valuation system and this is what will be the deciding factor if you plan on selling or utilising the equity in your home.
At No1 Property Guide, we use all 3 methods throughout our process. By using a combination of different methods, we can quickly establish what your factual options are.
This is all a part of Darren’s specialised new home system. Once we have an accurate understanding of the equity in your home, we can then move forward with showing you your factual options.
How Can I Raise My Property’s Value?
There are 2 main ways to increase the value of your home, paying off your mortgage and making alterations.
Paying off your mortgage reduces your total debt, and increases the amount of equity you have available to draw upon. For example, if your house is worth $500,000 and you have $200,000 left to pay off, then you have $300,000 in equity. So, the more of your mortgage you pay off, the more equity you will have in your home.
The other option is to make alterations and renovations to your home. Whether it’s adding an extra bathroom or updating the look from 80s chic to modern classic, a well-planned and successful renovation can add substantial value to your home.
Koce Family- Happy Homeowners since 2020
On the other hand, renovations can also add little to no value as well. Renovating an already new kitchen generally won’t add any value. And even if it did, it can often be less than the cost of renovation itself.
Make sure you consult professionals before undergoing any renovations to increase the value of your home.
Of course, aside from personally adding value to your home, you can also take advantage of its capital growth.
Myles & Megham – Happy Homeowners
Historically in Australia, property prices have doubled every 10-15 years. Another term for this is capital growth. In the last few years, prices have been skyrocketing across Australia, leading to huge capital growth.
This growth, combined with you paying off your mortgage, is the fastest way of building your equity. You can then utilise that equity to expand your property portfolio and build your second or even third home.