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Is It A Good Idea To Buy An Investment Property With A Home Equity Loan?

01/05/2023

Gone are the days when home loans were only taken when there were no other sources of money to build a family’s home. Instead, with primary properties settled in, families now focus on secondary properties and investments.

Investment properties are properties bought to sell at a later time to make profits. Buying a property with good potential in terms of the area and the design can be incredibly beneficial if you can find better customers for the property. Many people pursue property investing in Sydney as their means of living, and many families are getting into this cycle as a side hustle.

Real estate home loans, such as a home equity loan, are a source of money to pursue this interest in investment property. They are safe and timely, and you can profit from the deal if you choose the right property. So, are you wondering, can I buy an investment property with a home equity loan? Read on to know more.

What Is A Home Equity Loan?

Home equity loans are loans lent on your equity on the house as collateral. Also known as a second mortgage, you can borrow money from the banks and repay them by essentially pledging your home. If you fail to repay your loan, you will lose your house to foreclosure.

Now that you understand home equity loans, you might question what their uses are. And can I buy investment property with a home equity loan? Keep on reading to learn how to use your home equity loan to invest in properties.

Can I Buy An Investment Property With a Home Equity Loan?

Yes! You can use your home equity loan on anything you want to. Investing in a property is a great way to put money to use and is safer than most other investment options. When you have a property in mind to invest in, a loan is a safe option to source money from.

Getting a professional opinion is essential before making giant leaps in your property investment journey. You need to understand the risks and options before making a significant decision.

Is It A Smart Decision?

Financial security is an active concern for all families. Finding a way to earn passive income is always on the radar. Property investing in Sydney is a safe way to make money and can be incredibly profitable if done correctly.

If you are confident about the credibility and the worth of your property, it is wise to apply for a home equity loan and source your investment property. It will not cause much hassle and will be a profitable outing as a whole.

So, how can I buy investment property with a home equity loan? You can simply apply for a home equity loan on your existing property and use the money to invest in another property of your choice. 

What Are The Risks Associated With a Home Equity Loan?

The most significant risk associated with using home equity loans for property investing in Sydney is the foreclosure of your home if you don’t pay your loans on time. Therefore, you must ensure to have an exit plan to pay your lender in case you cannot sell your property on time to return your loans.

Another risk is if you cannot sell your investment property in time for the loan. This is why you need to make sure that you are capable of paying to ensure the safety of your primary home. A secondary investment should never risk your secure home; giving it adequate thought is important.

Start Your Property Investment Journey with InvestorFi

A home equity loan is an entirely safe and reliable option to fund your next investment property. The risks are minimal, and the rewards are worthwhile. If you see a property to invest in, home equity loans are an absolute option to pursue your interests.

InvestorFi offers services to help you get the best real estate home loans and make the right decision. We discuss your financial situation and plans to help you better understand your options and the future. We also explain your risks and options to help you make an informed choice. Are you ready for your first investment property? Contact us today to get started!

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This is what we do.

We are finance strategists in the Mortgage Broking industry, helping Australians build wealth through property investment.

Our sole purpose is to reinvent ways to keep the Great Australian Dream Alive. Because we believe it’s everyone’s right to the security home ownership affords our families and community. Yes, our niche is Finance Strategy for Property Investors, but it is not what we do that makes us tick;
it’s

Because property investment is a decisive step toward financial freedom, we cultivate lasting relationships with our clients. We ain’t just a ‘whame bam, see ya later man’ kinda outfit. In fact, our business is built entirely from our lasting relationships with our clients who have suggested us to their inner circle – their family and friends. That is a pretty big tick of approval and a sure vote of confidence.

This is How we do

What separates us from the rest?

Have you ever considered the difference between Mortgage Brokers?

A Broker worth their salt has a playbook of ‘scenarios’. They are finance strategies that have worked in the past. He will offer up one, two or even three scenarios that he thinks will work best for you. 

But the great ones challenge the status quo, strategising new plays that serve your unique situation and financial goals. They will study, visualise, and fine-tune before offering only the best scenarios that build a rewarding property Portfolio.  

They never let good be the robber of the best and only play to win!

InvestorFi is a group of finance strategists that will design a unique scenario for your state of play towards your long-term game plan.

But don’t just take my word for it.

Clients like Tony F. said: I couldn’t be happier with the service. Wayne was excellent in guiding me through and delivering a great investment loan. Very responsive and savvy investment brokers. Will continue to use their services in the next purchase. 

And like Kim, Wayne is extremely dedicated, professional and a pleasure to work with. He worked tirelessly to help me secure an alternate lender before the settlement date and was extremely prompt and clear in his communications with me. 

And 

Robert wrote: Wayne is always very responsive and takes the time to lay out all the options in plain English.

Reviews like this make our souls sing. We’re in the business of helping people achieve real results that last!

So if you’re looking for a great Finance strategist like these incredible clients, you’re in the right place.

This is why we do

Gone are the days a single income could afford 2.5 kids, a pet, and a four-bedroom house in the burbs! 

At InvestorFi, our sole purpose is to reinvent the great ‘Australian Dream’. Because we believe it’s every citizen’s right to the security home ownership affords our families and community, not just for today but for generations to come.

But because it’s become so difficult, it requires complex solutions. One way is to seek finance strategy before purchasing a home. This way, you can leverage your full potential to live where you want to and invest where you can afford to. 

Property ownership has become a game of ‘finance strategy’, placing a premium on finance know-how. That is why we value education; our mantra is knowledge equals freedom, but knowledge shared is freedom multiplied.  

There is no drought; we have hit a new era with its epic challenges. Not everyone is up for the grind it takes to keep the dream alive. That’s why we also place a premium on camaraderie. We don’t see ourselves as a ‘hit and run’ service but as a hub and a way of life.