{"id":9981,"date":"2016-10-25T13:48:21","date_gmt":"2016-10-25T02:48:21","guid":{"rendered":"http:\/\/realestatetalk.com.au\/?p=9981"},"modified":"2016-10-25T13:48:21","modified_gmt":"2016-10-25T02:48:21","slug":"accessing-your-equity-and-using-it-to-your-advantage","status":"publish","type":"post","link":"https:\/\/channels.realty.com.au\/realtytalk\/accessing-your-equity-and-using-it-to-your-advantage\/","title":{"rendered":"Accessing Your Equity (And Using it to Your Advantage)"},"content":{"rendered":"

Saving up for a deposit on your second property come seem somewhat out of reach, particularly when you\u2019ve already got mortgage repayments to worry about. So how are property investors managing to get their hands on the money to build their property portfolios?<\/p>\n

The answer to this question is equity. Equity is one of the greatest benefits of owning your own home. It\u2019s somewhat of a money machine where your wealth continues to grow and also allows you to develop a portfolio that builds wealth for your future.<\/strong><\/p><\/blockquote>\n

So what is equity?<\/h3>\n

\"equity\"Equity is the difference between the value of your home and the amount that you owe on it. For example, if your property is worth $600,000 and you owe $400,000 on your mortgage, then you have $200,000 in equity.\u00a0In order to correctly evaluate your equity, it is important that you establish the current market value of your property. You can come to this estimate by comparing similar properties in your area and researching how much they recently sold for. To gain a more accurate price, seek the services of a professional valuation expert.<\/p>\n

How do I access my equity?<\/h3>\n

Once you\u2019ve accumulated equity in your property, you\u2019ll require arrangements from a lender to access this money. There are several options for those wishing to leveraging equity and this will depend on personal financial circumstances. You should talk to a professional mortgage broker about how you can take advantage of your financial situation.\u00a0Options you may consider are to refinance your existing mortgage and take out a large sum or establish a line of credit. It is important to remember a lender will very rarely allow you to borrow against all of the equity you have in your property. More likely, they\u2019ll let you borrow 80% of this equity to make sure the loan is secure, even when the market fluctuates.<\/p>\n

How can I grow equity faster?<\/h3>\n

A popular method of growing equity is to generate value in your property. You can achieve this by undergoing home improvements. This method can achieve quite a large amount of equity for relatively low capital outlay as long as you are making changes that are more desirable to potential buyers.
\nIf you own a large block, subdivision is also a great way of accessing the equity in your property. The smaller, subdivided block will acquire a value if its own that you can borrow against to build a house. Or perhaps you\u2019d like to sell this land to earn a deposit for a new investment property.<\/p>\n

What is a good equity investment strategy?<\/h3>\n

Time is your best friend when it comes to property investment. Over time, the equity in your property will grow as you pay off the mortgage and the market value increases<\/strong>. You can use this growing equity as a deposit for a second property. As time goes on, you\u2019ll accumulate equity in two properties rather than just one and in turn create an opportunity to take out a deposit for a third and fourth investment property.
\nWhile you continue to pay the mortgage for your Principal Place of Residence, a tenant will be paying rent to help with your mortgage repayments each month.\u00a0 Both the tenant\u2019s financial contributions and the growth in property value will aid the growth of your total equity. The more properties you acquire and own, the more quickly your total equity will grow.<\/p>\n

What are the risks?<\/h3>\n

There will always be risks involved in any kind of investment. The danger with property investment is you could borrow too much money and if the interest goes up, you will not be able to cover your mortgage repayments. Also, if a decline in the property market were to take place, as well as a rise in interest rates, you may find yourself in a position where you\u2019ll need to sell a property with a significant loss.<\/strong><\/p><\/blockquote>\n

In order to reduce the risks associated with property investment, it is important to invest conservatively and seek the advice from a professional mortgage broker before you decide how much to borrow. They can help you make the smartest financial decision and avoid getting caught out.
\n\"\"
\nAs this article has outlined, there are a number of considerations when you\u2019re using equity to build your investment portfolio, which can have an effect on your long-term financial position. Having a professional team on your side could make all the difference to the outcome.
\nThe world of banking and finance can be pretty daunting for both novice and sophisticated investors. Since our establishment in 2002 we\u2019ve focused on providing outstanding service and business standards. This approach was vindicated when we were recently named Victoria\u2019s favourite mortgage broker at the 2015 Investors Choice Awards.
\nIf you\u2019re currently paying off your existing property and are considering leveraging equity, talk to Intuitive Finance for expert advice and support on the financial impacts of your personal situation.<\/p>\n","protected":false},"excerpt":{"rendered":"

Saving up for a deposit on your second property come seem somewhat out of reach, particularly when you\u2019ve already got mortgage repayments to worry about. So how are property investors managing to get their hands on the money to build their property portfolios? The answer…<\/p>\n","protected":false},"author":176692471,"featured_media":9982,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[2,13,36,17,25],"tags":[],"class_list":["post-9981","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-andrew-mirams","category-latest-story","category-property-investment-topic","category-property-investment","category-sponsored-channels"],"yoast_head":"\nAccessing Your Equity (And Using it to Your Advantage) - Realty Talk<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/channels.realty.com.au\/realtytalk\/accessing-your-equity-and-using-it-to-your-advantage\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Accessing Your Equity (And Using it to Your Advantage) - Realty Talk\" \/>\n<meta property=\"og:description\" content=\"Saving up for a deposit on your second property come seem somewhat out of reach, particularly when you\u2019ve already got mortgage repayments to worry about. So how are property investors managing to get their hands on the money to build their property portfolios? 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