Using Equity to Buy an Investment Property

Understand what equity is and find out how to access equity in your home and use it to purchase an investment property.

20 Responses to Using Equity to Buy an Investment Property

  1. Financial Mappers

    Investing in property can be an effective means of power charging your wealth. There are arguments for investments with either positive or negative cash flow. Having financial planning software which will integrate all your loans over an extended period of time will allow you manage your debts more efficiently.

    You could save yourself thousands of dollars in interest we a good debt management plan.

    One of the big time bombs, can occur when property investors don’t think about capital gains tax when selling the property. If you have owned the property for 20 to 30 years, capital gains tax can be a substantial amount of money. This tax reduces how much you can re-invest from the profits. Having financial planning software which will calculate your future capital gains tax will allow you to manage your cash flows more efficiently.

    The great thing about real estate is that if you never sell your property, you never pay capital gains tax. You just need to make sure that when you buy the property, it is something you can hold and pass on to your children as an inheritance. That means, having an adequate rental income to support you in your retirement.

    Do a YouTube search on Financial Planning Software and see what is available. Make sure it has good modelling tools and can give you easy to read reports on you investments.

    Managing your property investments and cash flows efficiently may save you thousands of dollars.

  2. Nelson Velasco

    Great video!!! Thank you

  3. gravediggy

    Great info thanks mate

  4. Alex Tupou

    Nice one Gavin. I can see that there are some comments made that are founded upon skepticism. There is an element of risk with all investments but please research with many other investors and other related professionals to satisfy yourself. Read all the real estate investment property books then make an informed decision. I like this video because it shows it can be done. Keeping in mind that this general advice Gavin gives is from Australia. Banks can be sketchy about loaning for cars and holidays but improvements on your home (house equity increase) and loans for investment property are lower risk loans for the bank. If you can pay off your own mortgage before investing into investment property then the options for you are "grunty" in that you now have a house value which is also the total amount of equity available to loan against as a deposit for each rental property you choose to purchase. As well as larger disposable income as any missed rent payments can be covered by yourself as you no longer have a personal mortgage. Then think about tax rebate on interest on the mortgage of the investment properties against your taxable income, increased capital against both properties, funding your retirement, etc. If worse comes to , then sell the investment property prior to the any mortgagee pressure to sell. Square up the debt and enjoy the increase in equity at the point of sale…. Make sure you know what kind of capital gains tax awaits you or if you claimed depreciation, what reclaim the tax department may want from you. Seek guidance from many sources…. Well I didn't mean to say this much. However thanks again Gavin. This is a great introduction to property investment.

  5. Malquan Gaillard

    Does this method impact the total loan amount that you qualify for?

  6. PseudoSarcasm

    Skip to 1:26 to start

  7. Jack's Son

    Good video other than speaking through a kazoo.

  8. KingRichTv

    So is it basically. A loan from your house to use for whatever reason. And if you sell the house say 50k more then the equity debt and money owed combined then that 50k is your profit? So any money that is left over from paying your debts is a profit.

  9. Brandon A. Deimel

    One thing he doesn't mention is interest rates.

  10. naresh limbu

    which method is safer to buy investment property with your equity ? Borrow more loan from your same bank or go with another bank?

  11. Omer Turhan

    So now do you owe $400,000 on the first house? (first scenario)

  12. X325

    Going on a holiday using home equity??? Invest in stocks?
    At least mention these are extremely bad use of borrowed money.

  13. Chris Francis

    Gavin!…you are awesome…you are really hear to serve…and add good to the world….thank you!

  14. Markus Hunter

    Thank ou for making this video…

  15. copland douglas

    Sounds so interesting but it's not a wise decision


    Does equity increase monthly payment?
    Let's say
    Property with a loan 300,000 – monthly payment 1000
    Equity loan 100,000 – monthly payment 800
    Total monthly payment = 1800
    Is my calculation correct?

  17. WI FI

    Is there interest on equity loans?

  18. WI FI

    When you say you have a house bought at 500k and have 300k left, is interest included in that?

  19. PI Finance

    Watch Daniel talking about his buying first investment property 🙂

  20. brian araluce

    very informative