We are coming to the end of 2022, a year that witnessed the Brisbane property market continue to grow well during the first half despite the adverse conditioning, such as disastrous floods that shook the entire state in the first few months of the year.
There is no denying that the property market is expected to boom as $ 5 billion worth of infrastructural development projects have been planned for the 2032 Olympics. This is the best time to buy an investment property in the capital of Queensland.
If you have substantial equity in your home, buy an investment property without a heavy deposit. Make sure you do proper research, know your estimated budget and avoid biggest blunders as a property investors to enjoy return on investment.
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What Does Equity Mean?
It is the different between the current value of your residential property and the balance of your home loan. For instance
If the current value is $1, 000,000 and balance of your loan is $700,000, your equity will be $300,000.
The best part is that you can access your equity if you still have a home loan. You can make home loan repayments even when buying an investment property.
You can also use Home Equity Access Scheme to support your retirement income. This allows old-age Australians to get a voluntary non-taxable loan from the government.
How to Utilise the Equity in your home?
Believe it or not! It is one of the most compelling sources of wealth. According to experts, people can use the equity in a current property as a deposit to pay off their investment loan. If this specific amount is enough to cover 20 per cent, you can easily borrow 80 per cent of the property's value. You don't need to pay lenders' mortgage insurance if you have the 20 per cent deposit from your equity.
The Property Valuation Report
Make sure you get a copy of a property valuation report to know exactly what your lender or bank agrees to when buying an investment property in Brisbane. It will also help you access the percentage of equity that you can use to buy an investment property.
You can make extra repayments weekly and monthly to minimise your mortgage. The more you repay, the more equity you will get. You can also increase your equity by doing some basic renovation in the kitchen, kitchen or painting the walls with a fresh coat. This way, you can add multiple properties in your portfolio. It is good to do thorough research and consider a complete Brisbane Property Guide before entering the real estate market.
Tips to Avoid Risk Possibilities While Using Equity
Being a property investor, you can’t risk both your properties i.e. a current home and a new investment property. To mitigate potential risk factors and utilise your equity at its best, consider the following tips:
- Make sure you do proper research and buy a property in the hotspots of Brisbane. Invest in the most developed or growing areas or suburbs where you can rent out the property easily.
- Hire a professional mortgage broker for expert advice if you want to enjoy investment perks for years.
- Experiencing a buffer for uncertain times can be a red signal. So, be careful.
