What You Don’t Know About Homeownership
Becoming a homeowner is a major step in the life of a renter. Turning in those revolving rental agreements in favor of a home that you can mold and shape in your own image and style is a liberating feeling for a new homeowner. However, as first time home buyers get older across the United States, the common sense considerations that homeowners must make when taking care of their properties have become less apparent. This leads to homeowners who don’t know how to properly care for their hard-earned properties.
This article is designed to help you navigate the ins and outs of the home maintenance process that comes after that monumental leap from tenant to an owner. In the process of this transition, you can learn a lot about yourself and about how to take responsibility for your most valuable possession in order to create an asset that you can take pride in and that will stand up to the test of time.
Your home is a powerful cash asset.
As a homeowner, you have access to an incredible wealth-generating asset that rests right beneath your feet. Real estate investors have been buying up property for generations because they understand this fundamental truth about the real estate market. A home provides unique structural leverage when it comes to borrowing money for other purchasing opportunities. Your ownership stake—or equity—in the home grows every month as you make your monthly payment back to the mortgage lender. This equity can be leveraged in a remortgage scenario to give you fast cash for a renovation or vacation opportunity, but this isn’t the only way you can leverage your property ownership.
You can also take out a hard money loan in order to purchase an investment property to continue growing your retirement portfolio. Alternatively, the equity in your home can be used as collateral to secure funding for an emergency medical treatment or other necessary expenses that come up in the course of life. The power of your home gives you largely untapped possibilities to create new lending relationships with creditors that many homeowners utilize for a number of easing effects.
A homeowner thinking of utilizing their real estate asset in order to buy a commercial property or to create residential rental income might want to think of this expense in the same way businesses do: with the number of times interest charges are earned ratio. An interest expense is a simple calculation of cash flow and free cash assets measured against the size of your overall debt. A company uses this TIE ratio in order to measure liquidity and stock pricing is reflective of this metric.
However, in the context of a real estate investment, time interest is a helpful way of thinking about your repayment obligation and your cash flow health. An interest expense can quickly add up if you don’t take the time to factor in mortgage repayments and the time interest associated with just paying the minimum every month. Overpaying and staying ahead of your mortgage expenses is a great way to improve cash flow and give you access to a greater TIE ratio for borrowing additional capital.
Your home requires routine maintenance.
A homeowner also has to think about maintenance issues that plague neighborhoods and urban housing: namely, pigeons and energy expenses. These two issues are major drains on the overall health of a property and can really eat away at your renovation and maintenance budget if you aren’t careful. Utilizing a FlowRite Metering service to track your energy expenditures is a great way to stay on top of the main issues that cause additional heating or cooling expenses in a home. An accurate meter is your first line of defense when it comes to identifying a failing roof or ledges, or spikes in energy usage due to aging windows.
Replacing these critical systems is a must when it comes to home care. A roof typically lasts about 20 years on a home, but many factors can contribute to a required replacement in the years leading up to a roof’s second decade on a home. Keeping roof, window, and air conditioning repairs closely monitored is the best way to keep your home running efficiently and in a cost-effective manner.
Another crucial maintenance issue is pigeon and rodent infestations. Commercial pigeon control services are adept at removing these nuisances from a property, and homeowners are finding that pigeon control is critical for maintaining a comfortable home as well. Pigeons carry pathogens and can scratch away your roof’s shingles if left unchecked. They contribute to the general disrepair of buildings all over the United States but are easily managed with a commercial-grade pigeon solution.
Homeownership comes with many potential pitfalls. A successful homeowner must keep apprised of these issues that may be affecting their home and take steps to remedy any issues without delay.