Do you want to be a millionaire? If you’re a homeowner, then you could be.
With the dramatic increase in property values across major cities, especially Sydney where Median house prices are fast approaching the $1M mark, many long-time homeowners have become millionaires, or at least have the potential to be.
The key to being on this path of wealth creation is to use your home equity in buying investment properties.
Now how do you do this? Just follow these steps.
1. Have your home appraised.
Learn what your property is worth in the market today and from there determine your equity. When it comes to the first, a professional appraiser would be required. So expect for the actual market value of your property to not always be what you think it is. Always base your calculations on the appraised value. In knowing the true market value of your property you can then calculate how much equity is locked in it. The equity is the difference between the market value and the remaining debt on your mortgage.
2. Make a contingency plan.
As they say it’s always best to be prepared. Using your home equity for an investment will mean that you are risking your home ownership so it is very important to be prepared for the possible setbacks that may happen if things don’t go your way. Consult financial experts to help you draft a contingency plan, including asset protection, which will allow you to pay off your mortgage or equity loan in the event that something goes wrong.
3. Find a good mortgage broker.
A good mortgage broker can help you release your equity for a new securable loan on an investment property. They can also help you structure your loan in the right way and negotiate with the current lender for a better deal on the existing home. It is therefore important to find a reliable and efficient mortgage broker to be with you every step of the way.
4. Choose a profitable property.
Once you’ve secured your home equity loan with the help of your mortgage broker, the next important thing to do is to pick a property that has the potential to yield capital growth. One example of a good property you can surely profit from are ‘walkable suburbs’ that are close to growing commercial hubs. Areas that are within close proximity to public transport to the city are also good candidates for profitable investment properties.
In taking advantage of the high property value and the historic low interest rates (some as low as 3.99 per cent) that are currently offered in the market today, you can reap rewards on the property investments you’ve made.
Don’t let your home equity sit around. Use this, with the help of the tips above, to purchase investment properties and become one of the homeowners that are becoming millionaires.
Chan & Naylor is a property and wealth advisory group that can help you grow and protect your wealth. We offer wealth planning, asset protection and investment advice for individuals, investors and business owners. We also offer business services accounting and business improvement solutions. Contact us today to get in touch with one of our finance experts.
Disclaimer: This article contains general information. Before you make any financial or investment decision you should seek professional advice to take into account your individual objectives, financial situation and individual needs.