Whether it would be your first investment property in Perth or another piece in a fine portfolio, you may be able to use lazy equity to finance the purchase. But what is lazy equity? Well, it is equity that increases due to a rise in property value. With our buyer’s agents reporting a lively Perth property market, it is almost certain that your property has seen an increase in value over the last year.
Uncovering Lazy Equity in Your Property
Property values for established homes in Perth have risen 6.2% from the June quarter of 2012 to the June quarter of 2013 and seem to be rising even more due to interest rate cuts. Land has risen as well, with the June quarter price for land 14.3% higher than at this time last year.
If you have been holding land, holding investment properties in Perth to rent or simply living in your house for the last year, the chances are high that your home equity has increased over that year. If your equity has risen, you may be able to use it to purchase another investment property without having to dip into your savings account.
How to Decide Whether to Take Advantage of Your Lazy Equity
The first thing you should do is call one of our buyer’s agents specialising in investment property in Perth and have your property appraised. Then, we can determine together if the increase in equity is enough to help you purchase another property.
Since interest rates are at an all-time low, it will cost less to borrow than at any time in history. At the same time, rental returns are strong and may be enough to cover your mortgage payments or produce positive cash flow. While the market is coming back, prices aren’t high enough to put properties out of reach for the investor.
Since you can usually borrow up to 80% of the value of a property when buying, you can multiply your equity by five to get a rough estimate of how much you will be able to borrow on a new property.
Call 1300 472 427 today to make lazy equity work for you.