8 Inexpensive Ways to Boost Your Home Equity

By Myles Leva


Last Updated: April 27, 2022



Real estate is an investment asset for many people. But for most homeowners, the home means a bit more than that.

Attempting to add equity to your home is a good decision regardless of whether you view it as a temporary investment or as a permanent home. You have a lot of control over the value of your home.

One of the barriers to meaningful increases in home equity is a rational concern – cost. Home improvement projects are expensive, after all.

There are actually a few creative and inexpensive ways to add equity to your home. Home improvements will always have their part to play, but you should know that there are inexpensive, seemingly small things you can do that make a big difference.

In this article, we will go over how you can punch above your weight to accrue more equity in your property. But first, a crash course on how equity works.



Home Equity 101

Home equity is the value of a home according to current market value. It is the current market value minus any liens/debt. This essentially means it’s the value of the home that you don’t currently owe your lender for.

Take the market value of your home, then subtract what you owe on your mortgage or any other collateralized debt obligations.

You have home equity the minute you make your down payment. Then with each mortgage payment, you are adding equity to your home.

If for any reason the value of your home appreciates, your equity will also increase.


Why Equity Matters

Your home equity determines what you can get from selling your home. It is also valuable as collateral for loans such as home equity loans and home equity lines of credit (HELOCs).

No matter how you intend to use your property, home equity is a powerful financial asset that should be maximized.

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How to Build Equity in a Home

The simplest way to build equity is to simply continue making your mortgage payments. The smaller your mortgage principal is, the more equity you can use.

The other way you can build equity in your home is by improving your home’s market value.

In general, there are a few simple steps you can take to quickly gain more equity.


Larger Down Payments

Making a larger down payment provides more equity immediately after closing. Making a down payment of at least 20% provides more equity while shaking off the need for private mortgage insurance.

Shorter Terms

A 15-year mortgage will see you gaining equity faster than a longer-term one would.

Pay More Each Month

Making larger payments is another fast way to build equity.



What home improvements add the most value?

The topic of home improvements that add value to your home deserves its own section.

Home improvements don’t match your home’s value dollar for dollar. Spending more on them doesn’t necessarily mean your home equity will be increased more efficiently. But the reverse is also true, as there are ways to get a lot more from each dollar spent.


Remodel the Necessities

The necessities of a home are the places where you can really push its market value up. The best thing about this is that some remodeling can be immediately advantageous to your lifestyle, or just plain necessary. Even when it comes to selling your house, a strategic remodeling can make the difference in actually closing.

If your bathroom or kitchen floors are repulsive, that’s a good place to start. Kitchen countertops are another soft target.

What goes on behind the scenes, such as plumbing and electric work, is normally expensive and hard to see. So, there are two areas to focus on first:

  • What you can immediately see
  • What you can quickly discover

You don’t need to update all the utilities in your home to build equity. But cleaning up any deficiencies or eyesores can give you more bang for your buck. Of course, never neglect things like plumbing and electrical work, as they will be crucial when it comes to your closing documents.

Luxurious remodeling jobs are not often so efficient. An indoor spa may increase your home’s value, but it won’t be efficient. Deck remodeling, sunrooms, and extravagant kitchen and bathroom remodeling have a similar effect.



How to Add Value to Your Home on a Budget

These are the life hacks that can help you build equity on a budget. You can use these ideas to punch above your weight budget-wise.


8 Inexpensive Ways to Add Value to Your Home

1. Paint Refresh

Repaint all painted surfaces if you’re thinking of getting an appraisal. It’s a cheap way to make a big difference.

2. Freshen up all Walls

This also includes paint, but you need to pay attention to details like outdated coloring, scratches, dirt, or fading wallpaper. The materials needed to address these issues are inexpensive and you should be able to do it all yourself.

3. Crown Molding

Adding crown molding is easy enough to do yourself and doesn’t cost too much. It’s cheap, adds to the appearance of your interior, and can be finished with a few basic tools and a nail gun. You will need to do some woodworking, but that’s as hard as it gets.

4. Ceiling Fans

Ceiling fans are appealing to homebuyers and appraisers. They are the cheapest option for cooling your home, adding immense lifetime value. They can cut down on AC costs significantly, and can even circulate warm air from some ceilings, cutting heating costs as well.

5. Paint or Stain Cabinets

Kitchen cabinets are the place to start. If you don’t want to spend too much, you can paint/stain them instead of buying new ones. Prefabbed options can still be quite cheap, however.

6. New Front Door

Your front door is one of the first and most noticeable aspects of your home people see. Getting an inexpensive, but appealing new front door with some character will make it appear much fresher.

If you don’t want to spend a couple of hundred dollars on a new door, a paint job is a highly recommendable alternative.

7. Power Wash Exterior Surfaces

This includes driveways, walls, walkways, patios, and other applicable surfaces. Depending on their current state, you may be surprised how new and fresh they look after.

8. Landscaping

Landscaping is hard work, but it doesn’t necessarily cost much. An attractive and clean landscape creates a strong impression.


Conclusions on Adding Equity to Your Home 

Home equity is an extremely useful asset for homeowners, investors, or just about anyone. Building equity is a natural side effect of paying back your mortgage over time. But you can improve the process by choosing a faster path to repayment. In addition, you can go for the low-hanging fruit of home appreciation – cheap, easy improvements that help you further build equity.

Photo by Binyamin Mellish


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