Unlocking Hidden Opportunities: Leveraging Equity in Property Investment - Ethicalgrowth

If you're a homeowner in Australia with untapped equity, it's time to seize this concealed opportunity. Referred to as "lazy equity," this underutilized asset is ripe for investment in the real estate market. With the guidance of a Buyer’s Agent in Australia, you can identify and harness this potential to expand your property portfolio.

Understanding Equity in Property Investment:

In property investment, equity signifies the value of an investor's ownership stake in a property. It delineates the variance between the property's market worth and any outstanding mortgage or loan balances secured against it.

Equity Calculation Formula: Equity = Property Market Value – Mortgage/Loan Balance

Illustration of Leveraging Equity in Property Investment:

Here's the strategy: Let's leverage your equity to your advantage in the property market. For instance, if your home is appraised at $650,000 and your outstanding loan balance stands at $380,000, you possess $270,000 in equity (your ownership portion, with the remainder belonging to the bank).

Typically, Australian banks extend loans up to 80% of the property value. This implies that you could potentially increase your loan to $520,000, unlocking $140,000 in funds suitable for an investment property deposit.

While the prospect of acquiring additional debt may seem daunting, it's essential to note that many successful real estate investors, including millionaires and billionaires, strategically leverage debt to enhance their wealth.

With the available $140,000, you can contemplate purchasing an investment property valued at $500,000 (inclusive of a $100,000 deposit and associated fees).

Assuming a conservative annual growth rate of 6% over a 10-year span, the investment property's value could escalate to $895,000, yielding a potential profit of $395,000 within a decade.

At this juncture, you have flexibility. You may opt to sell the investment property and utilize the proceeds to reduce your mortgage. Envision selling it for $895,000, settling the investment property debt of $400,000, and retaining $495,000 to discharge your home loan, thereby achieving a debt-free status!

This streamlined scenario exemplifies how a Buyer’s Advocate in Australia aids investors in leveraging their latent equity for optimal gains in the real estate market.