Equity is the difference between what your home is worth and how much you owe on it.
For example, if your home is worth $500,000 and you owe $200,000 you have $300,000 in equity. Over time as you reduce the amount you owe on your home or the value of your home grows, your equity increases. Its that simple.
Unlocking the equity in your home can be an effective way to assist in purchasing a rental property to help build your wealth. Residential investment properties are a popular investment, having the potential to provide investment security, capital growth and rental income. There may also be tax advantages. Negative gearing and depreciation allowances are also popular ways to reduce your tax liability, especially at the end of the financial year. You should consult your financial and taxation advisers before determining if this strategy suits you.
If you haven't already realized your potential equity, further property investment may be more achievable than you might think. The key factor is getting the right advice to help ensure you make the right decisions about your financial structure.
InvestRent has partnered with Maze Financial who caters specifically to the needs of residential property investors.
Maze Financial is a Mortgage Broker, Financial Adviser and SMSF Property Specialist. Maze provides advice on insurance, investment property, superannuation and home loan structuring.
Maze is owned and operated by Ben Anderson and started his business because he felt there was a better way to help people with their finance than what was being offered by the big 4 banks.