With values rising across many key markets, anyone who has harboured ambitions of creating their own property investment portfolio should consider whether there’s an opportunity to make their move in the short term.
A recent analysis from the industry researcher CoreLogic found 43% of suburbs nationwide now have values at all-time highs.
When you combine all the suburbs of our state capitals, that figure stands at 49%.
With interest rates still in a holding pattern and predicted to stay this way until early 2025, it’s probably a smart idea to create a strategy that will allow you to buy an investment property before rates come down and prices accelerate.
As experienced real estate agents in your area, we recognise many would-be investors already have substantial equity in their existing mortgages that can be unlocked and used for
investment.
Using your home equity to invest in property can be an intelligent way to grow wealth and secure your financial future. So, we’ve created five tips to help you use the equity in your mortgage. We hope you find them helpful.
- Know Your Numbers – Your first step is to establish how much equity you have available. You can do this by obtaining a property valuation and subtracting your remaining mortgage balance.
- Your Options – Once you know your equity, you can explore different options to access those funds, such as a home equity loan, a line of credit, or refinancing. Chat with a mortgage broker or financial advisor to find your best solution.
- Set a Realistic Budget – It’s crucial to set a clear budget. This involves factoring in not only the purchase price of the investment property but also additional costs like stamp duty, legal fees, and potential renovations.
- Research Your Potential Locations – Location is paramount when choosing an investment property. Research areas with strong rental demand, good infrastructure and potential for capital growth. Look for suburbs with a mix of renters and owner-occupiers as this delivers a more stable market. Explore up-and-coming areas, too.
- Property check-up – Before you commit to any property, conduct thorough due diligence. This includes getting a building and pest inspection.
- Investing requires teamwork – Property investment can be a complex process, so surround yourself with experts who can guide you. A financial advisor and a mortgage broker can provide valuable insights. They will also help to ensure any purchase aligns with your overall financial goals.
NOTE: The information in this article is general in nature and provided as a market overview only. Always consult your financial advisor or accountant for advice specific to your personal circumstances.