When thinking about your personal wealth, what are some of the things that first come to mind? You may think about your savings, wise investments, or even paying off large amounts of debt. These can be considered ways of accumulating wealth.
But have you thought about your family home? Have you considered your house as part of your personal wealth? Well, as shown below, statistics indicate you should.
Your home is your biggest financial asset
The Australian Bureau of Statistics (ABO) has come up with interesting results when researching the largest assets owned by individuals.
Their results show that owner-occupied houses are the largest assets owned. The loans to purchase owner-occupied dwellings are also the largest value of all household liabilities.
[ctt template=”7″ link=”0mbv9″ via=”no” ]Owner-occupied houses are the largest assets owned.[/ctt]
Most Australians nowadays find themselves in this situation, so one great way to start building your wealth while having a mortgage is trying to decrease your existing loan to value ratio on your home.
You may also be interested in: Would You Buy A House With Friends Or Relatives?
Two strategies to consider:
Increase the value of your family home
When trying to increase the value of your home, you may think there’s not much you can do about it. Property value, location and nearby residential developments are all fixed factors you can’t influence.
But here’s one factor you can change – home maintenance. Keeping up with all the necessary repairs, maintenance work and maybe some aesthetic improvements are a few things you should consider. These are all great ways to increase the value of your home.
[ctt template=”7″ link=”0mbv9″ via=”no” ]Keeping up with maintenance work and aesthetic improvements are some of the things you should consider to increase the value of your home.[/ctt]
Making improvements on your family home is also guaranteed to increase the level of comfort and enjoyment for you and your family. This seems like a win-win solution, doesn’t it?
The even better news is, even if you will think about selling your family home in the future, you will generally find that your main residence is fully exempt from Capital Gains Tax. Therefore, decreasing the loan to value ratio of your family home can mean more money in your pocket.
Make extra mortgage repayments
Trying to make extra mortgage repayments can be an efficient strategy for your home loan, both in terms of reducing the term of your loan and on saving in payable interest.
Before deciding on adopting this strategy, you will need an honest evaluation of your finances. Here is where your accountant can give you a hand. Depending on your financial situation and the flexibility of your surplus, you can decide on how many extra mortgage repayments you can afford.
You may also be interested in: Head in the Sand? It can cost you your house.
In a nutshell:
It’s never too late to start thinking about your wealth. Actually, the sooner you start the better.
The two strategies presented here are not the only ones you can take into consideration. But they are great to help you realise the power of taking small steps in the right direction.
Start thinking about ways you can pay off your debts and how you can increase the value of the assets you already have. The specialists at Shuriken Wealth are ready to offer expert advice on this matter. Get in touch today.