What does the concept of sweat equity refer to?

Sweat equity refers to the value added to a property through the owner's personal labor and improvement efforts rather than a financial investment. When homeowners engage in renovations, repairs, or enhancements to their property with their own hands, they are essentially increasing the value of that property through their hard work. This concept highlights the contribution of time and effort in a way that translates into financial value when the property is sold or valued.

The idea of sweat equity is particularly significant for individuals who may not have substantial monetary resources to invest in a property but can contribute through their skills and labor. This allows them to build equity and improve their living conditions while enhancing the overall property value without solely relying on external financial input.