In times of economic uncertainty, it can be challenging to make sound financial decisions when it comes to real estate. Whether you’re a buyer looking for a new home or a homeowner considering listing your home, it’s important to make smart decisions in order to weather whatever comes next. Here are some ways to ensure that your home is a financial asset and not a liability.

Prioritize equity building

If you are considering buying a home, it’s essential that you put together the most generous down payment possible. In a competitive market, having a large down payment can help put you ahead of other potential buyers. Setting aside money for new furniture or landscaping? Put that off in favor of bulking up your down payment. A bigger down payment is a good start to building equity in your home.

Once you buy, go through the home inspection report and look for suggested repairs and upgrades that will immediately add value to your home. Invest in cost-effective improvements that make the home itself worth more and contribute to increasing equity.

If your income is stable, put off discretionary spending in favor of adding to your emergency savings and making extra payments to the principal on your mortgage. This may also be a good time to create the ability to tap into your home’s equity through a HELOC (home equity line of credit). While you don’t want to use those funds immediately, they may come in handy down the road in the event of a temporary financial setback.

Create rental potential

If you have reason to believe that your income could be reduced or interrupted in the future, consider whether you have a space that could affordably be converted into a rental property. A garage apartment, in-law or au-pair suite, guest house, or carriage house may allow you to create an additional revenue stream that you can apply to paying your mortgage each month with minimal initial investment.

For single homeowners, you could also consider taking in a roommate in order to share expenses and put more money toward your mortgage principal. If you’re just beginning the buying process, you may want to prioritize properties with guest quarters and separate entrances or properties with investor potential, like duplexes, triplexes, and quads. This type of potential helps you build a revenue stream that can help support you through any future economic downturns.

Shop home warranties

If you are experiencing job loss or a reduction in income, an unexpected expense like a roof repair or HVAC replacement could be the difference between keeping your head above water and drowning in debt. If you don’t already have a home warranty, begin shopping around and find one that offers you protection from unforeseen expenses.

For buyers, consider asking for a home warranty as part of your purchase. This will offer you added peace of mind and help you avoid unexpected surprise costs during your first year of homeownership. Set aside funds to pay your deductible in case you have to make a claim against your home warranty coverage.

Consider refinancing

Refinancing your mortgage might also be a financially beneficial step to consider. Consider talking to a lender about your options and whether refinancing makes sense for you.

By lowering your payments through an interest-rate reduction, you may be able to make your home more affordable each month. Alternatively, if your income is holding steady, explore the possibility of refinancing into a 15-year mortgage rather than your current 30-year. This will allow you to build equity faster and may offer an additional hedge against recession.

Consult on smart improvements with your real estate professional

If you are currently a homeowner, sit down with your real estate professional and talk about the current market. Consider what improvements you can make that are affordable and value-added. These can increase your home’s value and add equity you can tap into in the event of a financial downturn.

Your real estate agent or broker knows the difference between must-have, nice-to-have, and no-big-deal home improvements. There’s no point in spending your resources on designer trends that do nothing to improve your bottom line.

According to a recent study from Remodeling magazine, the top five least expensive home repairs with the biggest return on investment (ROI) include:

• Steel entry door replacement (63.8% ROI)
• Garage door replacement (93.3% ROI)
• Fiberglass door with dual sidelights (59.7% ROI)
• Manufactured stone veneer (91.4% ROI)
• Vinyl siding replacement (67.2% ROI)

By working with your real estate professional, you’ll learn what updates and upgrades buyers in your market are looking for—and what makes the difference when you’re looking to increase your home’s price and marketability. You’ll also avoid pricing yourself out of the market with over-the-top updates that will never provide sufficient return on investment.

If you’re like most Americans, a home is your single biggest investment. Make it count by keeping an eye on the bottom line and seeking out expert advice. A home is one of the most important assets you can have—so it’s time to put that home to work for you.