Which term describes the process of adding value to a property through effort rather than financial investment?

The term that describes the process of adding value to a property through effort rather than financial investment is "sweat equity." This concept emphasizes the value generated by the labor and time spent on a property, such as performing renovations, repairs, or maintenance activities that improve its overall condition and market appeal.

In contrast to financial investments, where funds are used to enhance property value through paid services or materials, sweat equity is rooted in the personal involvement and effort of the property owner or workers. This approach can significantly reduce the costs associated with property upgrades while simultaneously increasing its value.

Understanding this concept is crucial, particularly for first-time homebuyers or investors looking to maximize their investment without a substantial upfront financial commitment.