What is a Renovation Credit?
A Renovation Credit is the amount paid back to a co-owner from the property’s sale proceeds to cover expenses paid when renovating the property.
If an Ourboro homeowner conducts renovations that increase the home’s value, Ourboro will give the homeowner a credit, when the home is sold, for some or all of the costs incurred.
Why is this term important?
Renovation Credits are important as they help ensure co-owners are paid back for the renovation costs they incurred to improve the property’s value.
If a co-owner renovates the home using their own money and then sells the property at an appreciated value, We will benefit from the appreciation, without having paid any of those renovation costs. Therefore, a Renovation Credit allows the co-owner to be paid back for the portion of costs that Hany Adam Homes would otherwise have contributed.
Here is an example:
Let’s say a co-owner pays $50,000 to renovate their kitchen then, a year later, they decide to sell the home. When the home is appraised it’s determined that the kitchen renovation has increased the property value by $75,000.
Once the home sells, the co-owner could receive a renovation credit of up to $50,000 from the home’s sale proceeds.
