How to Use Equity to Grow an Investment Property Portfolio

If you’re considering using equity to expand your investment property portfolio, you’ll need to carefully consider your options. You should always seek professional advice on the matter. You should also research the local property market and understand how it responds to rental demand. You should also calculate your potential rental income and outgoing expenses.

As a general rule, housing values appreciate over the long term. However, there may be short-term downturns that affect investment property values. In such a case, you can make improvements to your properties that will increase their value and rental income. This tactic is called “equity locking.”

If you own residential property, you may be able to use your equity to buy an investment property. Your equity is the difference between your current market value and the amount you owe on your property. Equity is a valuable source of funds. If you need financing for an investment property, most banks will lend up to 80% of the current value of the property minus the outstanding debt.

Another way to use equity to grow your investment property portfolio is to purchase another property that generates cash flow. This is a great way to access funds and qualify for an additional loan. It’s also a good way to increase your portfolio without using up all of your capital up front.