“Fortune favors the bold” is the Latin proverb used by those who truly want to be successful in life. This so called “fortune” may be monetary in value or it may be something bigger, such as realizing your passion in life. Perhaps it’s a combination of both.
So many homeowners currently sit on untapped potential known as the “equity” in their home. This opportunity that currently presents itself won’t be here forever. Below are three popular examples of how some of my clients and business associates are using their equity to realize their true wealth by accessing their home equity:
- Home renovations. It’s no secret the pandemic has forced us to reassess how we live and work at home. For some, a revamped home office has made how we work from home easier. For others, a kitchen renovation may be the perfect solution for the culinary skills families have developed by cooking and eating at home more often. The extra industrious out there have even gone as far as building rental/in-law suites in their homes and carriage homes on their properties. Whatever it is these folks have built, there’s a good chance that every dollar spent has also increased their home’s value.
- Investing. For the investment savvy, borrowing to invest in a business they are familiar with has become a popular option. This may be something as simple as switching over to freelancing in a respective profession and needing the confidence of a financial cushion while launching into “solopreneurship”. For those with an accredited financial advisor this may mean accessing the capital markets and figuring out an effective tax strategy. For the truly passionate, I see home equity being used for seed capital to launch that “hobby” businesses that ranges in nature from the artistic to the athletic.
- Buying an Additional Property – In some regions of our country buying a secondary property has become prohibitive in recent times. That said, the biggest investment opportunity for a secondary property is within their own home, particularly when accessing funds for a down payment on an additional property. Considering a rental property in a geographic region a buyer is familiar with, is still a traditional option many are able to choose if the numbers make sense. Also of note is the distribution of family wealth currently taking place, when it comes to real estate. Examples of wealth transfer include using home equity to purchase a home for kids to live in while at university or assisting the family members with a down payment on their first home. For those considering a more affordable property that may be considered “non-conforming” due to zoning, home equity has been an excellent option. Examples of “non-conforming” properties include micro condos, tiny homes, cottage properties, leasehold properties, and commercially-zoned residential properties in recreational areas, such as ski resorts.
To borrow another popular quote from Walt Disney “if you can dream it, you can do it”. Having the immediate financial means to support your dream, makes building your true wealth a reality. Determine what true wealth is to you and if accessing home equity can help with this, speaking to a mortgage professional is your first step towards making it a reality.