{"id":5466,"date":"2024-08-15T09:36:29","date_gmt":"2024-08-14T23:36:29","guid":{"rendered":"https:\/\/financialplus.com.au\/?p=5466"},"modified":"2024-08-15T09:38:02","modified_gmt":"2024-08-14T23:38:02","slug":"how-to-buy-an-investment-property-using-your-homes-equity","status":"publish","type":"post","link":"https:\/\/financialplus.com.au\/how-to-buy-an-investment-property-using-your-homes-equity\/","title":{"rendered":"How to buy an investment property using your home\u2019s equity"},"content":{"rendered":"

\"\"Want to grow your investment portfolio but have most of your wealth tied up in your family home? You may be able to leverage recent gains in the property market as equity for an investment property. Let\u2019s take a look.<\/strong><\/p>\n

We all have a few financial goals.<\/p>\n

And right now, investing in a rental property is one of the more popular investment goals among Australians.<\/p>\n

In fact, more than one-in-five Australians (21%) aspire to own investment properties to build their wealth, according to\u00a0MLC\u2019s Financial Freedom report<\/a>. And interestingly, this percentage increases to 27% for Gen Zs and 23% for Gen Ys.<\/p>\n

Investors are also piling into property, with lending for investment properties up more than 30% over the past year, according to\u00a0Australian Bureau of Statistics data<\/a>.<\/p>\n

It\u2019s not hard to see the appeal.<\/p>\n

Rents\u00a0have surged 39.7%<\/a>\u00a0over the past five years, rental vacancy rates are\u00a0wafer thin at 1.3%<\/a>, and\u00a0home values nationally have jumped 13.5%<\/a>\u00a0since January 2023<\/p>\n

Recent property price increases can hold the key<\/h3>\n

CoreLogic\u2019s latest\u00a0Pain and Gain report<\/a>\u00a0reveals that property profits have just hit a 14-year high.<\/p>\n

This saw homes resold in the first quarter of 2024 dish up a median profit of $265,000.<\/p>\n

So how does \u2018cashing out equity\u2019 in recent property gains work if you don\u2019t sell your home?<\/p>\n

Here\u2019s one example.<\/p>\n

Let\u2019s say you bought a $750,000 house five years ago that, due to property price increases in recent years, is now valued at $1 million.<\/p>\n

And let\u2019s also say you took out a $600,000 loan for that house, which you\u2019ve managed to pay down to $500,000.<\/p>\n

By refinancing that remaining $500,000 home loan balance into a $700,000 loan (70% of your property\u2019s new market value), you can unlock $200,000 in equity to use as a deposit for an investment property.<\/p>\n

It\u2019s also worth noting that when using this strategy banks will typically let you borrow up to 80% of a property\u2019s market value.<\/p>\n

So if you upped the ante and refinanced to an $800,000 loan, you could unlock $300,000 in equity.<\/p>\n

This allows you to enjoy all the perks of becoming a property investor \u2013 including earning rental income, capital gains and possible tax benefits \u2013 potentially without drawing upon cash savings.<\/p>\n

Better still, if your rental property grows in value, the rising equity in that property can be used to invest in additional properties.<\/p>\n

Other strategies to become a property investor<\/h3>\n

There are plenty of pathways to becoming an investor.<\/p>\n

You may have the funds available to pay a cash deposit.<\/p>\n

Or you might be thinking of holding onto your current home, and using it as a rental after you upgrade to your next home.<\/p>\n

Or, you might have other investment goals outside the property market altogether (such as using your home\u2019s equity to invest in shares or boost your super balance).<\/p>\n

What matters is that you know the options available for your situation.<\/p>\n

Like to learn more? Call us today to find out how you could become a property investor.<\/p>\n

Disclaimer:<\/strong>\u00a0The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.<\/p>\n","protected":false},"excerpt":{"rendered":"

Want to grow your investment portfolio but have most of your wealth tied up in your family home? You may be able to leverage recent gains in the property market as equity for an investment property. Let\u2019s take a look. We all have a few financial goals. And right now, investing in a rental property […]<\/p>\n","protected":false},"author":23,"featured_media":5468,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"nf_dc_page":"","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[110],"tags":[],"class_list":{"0":"post-5466","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-home-loans","8":"entry"},"yoast_head":"\nHow to buy an investment property using your home\u2019s equity · FinancialPlus Mortgage Broker Gold Coast<\/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:\/\/financialplus.com.au\/how-to-buy-an-investment-property-using-your-homes-equity\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"How to buy an investment property using your home\u2019s equity · FinancialPlus Mortgage Broker Gold Coast\" \/>\n<meta property=\"og:description\" content=\"Want to grow your investment portfolio but have most of your wealth tied up in your family home? 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