Unlocking the Potential of Equity in Your Australian Home

If you have untapped equity in your Australian home, it’s time to take advantage of this hidden opportunity. This unutilised equity is often referred to as “lazy equity,” and it’s time to put it to work in the real estate market.
A Buyer’s Agent Australia can help you identify lazy equity and build your property portfolio.

What is equity in property investment?

In property investment, equity refers to the value of an investor’s ownership interest in a property. It represents the difference between the property’s market value and the amount owed on any outstanding mortgage or loans secured against the property.

Equity can be calculated using the formula:
Equity = Property Market Value – Mortgage/Loan Balance

Example of leveraging the equity in property investment
Here’s the plan: Let’s leverage this equity and make it work for you in the property market.

• For example, if your home is valued at $650k and your loan balance is $380k, you have $270k in equity (the portion you own, while the bank owns the rest).
• Typically, Australian banks lend up to 80% of the property value. This means you can potentially increase your loan to $520k, unlocking $140k in funds that can serve as a deposit for an investment property.
• Now, you may be hesitant about taking on additional debt, but here’s a fact: Many successful real estate investors, including millionaires and billionaires, have used debt strategically to build their wealth.
• With the available $140k, you can now consider purchasing an investment property valued at $500k (including a $100k deposit and associated fees).
• Assuming a conservative annual growth rate of 6% over a 10-year period, the investment property’s value could rise to $895k. That’s a potential profit of $395k within a decade.
• At this point, you have options. You can choose to sell the investment property and use the proceeds to pay down your mortgage. Imagine selling it for $895k, settling the investment property debt of $400k, and having $495k left to pay off your home loan. Achieving a debt-free status!
• This straightforward example showcases how Buyer’s Advocate Australia is helping investors to use their lazy equity to their advantage in the real estate market.

Wrapping Up

Keep in mind that specific tax implications may apply, and this illustration is meant to highlight the concept.

Remember, real wealth is built over the long term. Imagine holding the investment property for 20 years with a conservative growth rate of 6%.

Your home value could reach $2.08m, while the investment property’s value could potentially hit $1.6m, generating rental income of approximately $900-$1,100 per week.

Don’t let your equity go to waste.

Start leveraging your lazy equity today with the best Buyer’s Agent Australia and unlock its true potential in the Australian real estate market.

Legal Disclaimer: **Please note that these figures are based on historical growth rates, and future returns are not guaranteed. This information is provided for educational and illustrative purposes only. All investments involve risks, and it’s essential to consider your individual financial circumstances before making any real estate investment decisions.