Strategies for home owners
Today’s climate of cooler property prices coupled with high rents and low vacancy rates is making an investment property much more affordable. Part of the appeal for established home owners is that it’s not always necessary to have a cash deposit.
Our experience suggests that couples or mums and dads who own their home may not realise that they can use home equity (the property’s value less the balance of the loan) to fund an investment property.
In fact, if you have cash savings it can make better financial sense to pay down your home loan then use your equity as security for an investment property. This is because the loan interest on a rental property can be claimed as a tax deduction – a tax break that doesn’t apply to your own home.
It’s an approach that may not suit everyone but it’s worth considering as a way to put home equity to work.
Regardless of whether you’re a first timer or an existing home owner, I can discuss the various options available to fund an investment property. Together with the right loan, you could be building the foundations of personal wealth and security.