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An increase in equity created by the labor of the owner.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.
The physical work that one puts into an asset, company, or venture that increases its value. For example, one may work constantly on one's writing business so as to increase the revenue one receives from various contracts. This, in turn, increases the value of the business when the writer decides to sell the contracts to someone else. Likewise, one may build a new front porch onto one's house to increase its resale value. In both cases, the physical work is called sweat equity.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
sweat equityAn increase in the value of property due to the rehabilitation and renovation efforts of the owner,usually acting as his or her own general contractor,subcontractor,and laborer.
The Complete Real Estate Encyclopedia by Denise L. Evans, JD & O. William Evans, JD. Copyright © 2007 by The McGraw-Hill Companies, Inc.