Sweat equity is a term used in real estate and in the business world. For real estate, sweat equity refers to the amount of effort a homeowner or investor puts into improving a property. For those interested in flipping homes, this concept is crucial to determining the home's value. Here is some more info about sweat equity to help you understand the basics:
Sweat equity is difficult to quantify. However, there are ways you can calculate it to figure out an accurate valuation for your home. One way to find the sweat equity value is to consider the original value of the property and combine it with the cost of your materials to make your improvements. By subtracting that number from a final sale price—whether real or estimated—will tell you your sweat equity in dollars.
Other variables can affect this formula, such as the percentage of fluctuation in market values. The value of certain improvements and additions may also be higher in one area compared to another.
What sort of projects and improvements add to your sweat equity? Here are some examples:
While sweat equity can be tricky to calculate, it's important for every homeowner to understand. Whether you plan to live in your home or flip it right away, adding to sweat equity can have major benefits.
I'm John Mahan, Sales Associate with William Raveis Real Estate, Harwich Port Office.
Throughout his childhood, John Mahan spent summers on Cape Cod at his parents’ home in Dennis Port. His intro to the Cape was, as he puts it, when his parents “carried me down the stairs at Sea Street Beach when I was a week old.” With a lifelong connection to Cape Cod, it seemed only natural for John and his wife, Mary, to move to Harwich – where they still reside – with their two young children in 1996.
Prior to moving to Cape Cod, John lived in the Worcester-Auburn area where he worked for Mass Electric for 10 years and was a member of the International Brotherhood of Utility Workers. When John and his family moved to the Cape, he worked at NSTAR for six years.
John began his career in real estate in 2002 when he joined Team Waystack Realty in Harwich Port. He has been a consistent top producing realtor in the Harwich area for the past 20 years. John’s approachable demeanor, combined with an integral understanding of the Cape Cod residential real estate market, have allowed him to build trusting, long-term relationships with his clients – both sellers and buyers.
