Renovations are a fantastic way to add value to your property and make it easier to sell on the real estate market. However, paying for a new set of windows, a new kitchen, or a different bathroom isn’t something that works for everyone’s budget. The good news is that there are solutions out there for people who don’t have much money to spend but still want to get the most out of their real estate investing opportunities.
If you’ve recently purchased a property that needs a little extra work, make sure that you consider all your options before you break into your savings. Federal tax credits, marketplace lending, and other solutions all exist to make your life a little easier.
Special Credits for Certain Renovations
Depending on what kind of home renovations you’re planning on making, you might be able to transform your property for free with the help of government grants and tax credits. Examples of improvements that can be included in the tax credit group for federal systems include:
- Central air conditioning
- Roof repair or replacement
- Replacing windows and doors with U-Factor and SHGC factors less than 3
- Water heaters
Additionally, if you’re interested in making your property more environmentally friendly, there are some states that will offer additional support for alternative energy renovations. For instance, you may be able to get up to 30% off the price of a solar water heater, and 30% of the installation and equipment costs of geothermal heat pumps. Some agencies also provide money off fuel cells for residential areas and small residential wind turbines.
Medical Home Improvements
If you have a buyer lined up for your home, then you could also add some value back into your real estate investing by getting credit for medical home improvements for someone who has a disability. These deductions from your tax return must be itemized, however, and they are required to cost more than 10% of the gross annual income that you report at the end of the year.
Examples of medical expenses might include things like making the home more wheelchair accessible with widened doorways and wraps, moving electrical outlets, or installing lifts and railings. Because medical improvement grants are so limited, they generally aren’t the best option for people making home renovations for real estate investments.
Other Forms of Lending
Finally, if you’re struggling to make ends meet on your latest project, but you know you need to make some renovations to get the most out of your new property purchase, then you could consider an alternative solution, like marketplace lending.
The MPL borrowing platform offered by Sharestates offers financing for real estate investments. By choosing marketplace lending over traditional loans, you can get access to credit where it was previously unavailable and unlock new incentives from an investor perspective. Though marketplace lending might not be the right option for everyone considering real estate investing and home renovations, it’s worth speaking to the experts about the options available to you.