Unlocking The Equity In Your Home To Buy Investment Property

UNLOCKING THE EQUITY IN YOUR HOME

TO BUY INVESTMENT PROPERTY

Owning your own home represents one of the most

significant investments that many of us will make in

our lives. Putting a roof over our heads is a basic

human need, however the recent spike in house

prices has meant that home ownership ties up a

significant amount of capital that limits investment

opportunities in other assets.

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The recent push towards home equity loans has

provided a new means to unlock the value of

your home and reinvest the proceeds into further

investment properties. If utilised correctly, this

approach can offer the foundations for a

substantial investment property portfolio. More info on:



Buying a property with the equity from your home

remains a popular investment strategy based upon

its potential to generate rental income and capital

growth. Property also offers a secure capital

investment given housing prices have not been

exposed to the same level of volatility in

comparison with recent fluctuations in the stock

market.

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By reducing your tax

liability at June 30 this will

further set you on the path of

accumulating wealth in

preparation for retirement.

As ever, receiving

professional taxation advice

remains paramount before

making an investment

decision in property.

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CONSIDERATIONS AND RISK

By releasing the equity from

your own home you are

offering this property as

collateral should you default

on your loan. For this reason,

it is important to ensure that

your home is adequately

protected from such an

eventuality by seeking

professional advice.

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USING HOME EQUITY LOANS TO YOUR ADVANTAGE

Accessing the equity

from your own home is

one the most powerful

investment tools

available to Australians

as they approach

retirement.

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More favourable loan terms – If structured

correctly, lenders for home equity loans will provide

more favourable interest rate terms in comparison

with investment loans for the purchase of other asset

classes. It may also be possible to finance your

home equity loan from a number of lenders in order

to benefit from improved terms.

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Putting your equity to work – In

spite of making mortgage

repayments for many years and

the associated capital growth of

your property, you may be left

with little to show financially for

your investment. With so much

of your own money tied up in the

value of your home, it makes

sense to tap the equity of your

property in order to diversify

your investment portfolio.

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Tax incentives – as discussed,

entering into a home equity loan may

offer significant tax concessions on

the basis of negative gearing and

depreciation.

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WHAT IF I’M STILL PAYING MY MORTGAGE?

In some cases it may be possible to release the

equity from your home even if you’re still

repaying your mortgage. This is particularly

attractive for home owners that have enjoyed a

significant appreciation in the value of their

property.

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Unlocking The Equity In Your Home To Buy Investment Property