Owner-occupiers urged to unlock equity

Owner-occupiers can unlock newfound equity in their own home to purchase an investment property, says a Melbourne-based mortgage broker.

Australian Property Home Loans director Adele Andrews (pictured) said there was still heat in property markets across the country with lots of opportunity to purchase an investment property.

“It makes sense for people to take advantage of the equity built up in their own homes if they want to build their property portfolio,” Andrews said.

“There is lots of demand from tenants, so now is a great time to arrange a valuation of your owner-occupied home. The equity is the difference between the valuation price of your property minus the debt owed.”

Andrews said it was a no brainer for owner-occupiers to use their recent equity rather than spend their hard-earned savings on a deposit for an investment property.

“I strongly recommend partnering with a broker who has access to multiple lenders on their panel. It is so important to align yourself with a good broker who can help you unlock equity to make this happen,” she said.

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Andrews said now was a good time to consider purchasing an investment property as rental vacancies across Australia were very low.

“It comes down to your clients’ goals and objectives at the end of the day,” she said.

“I do a deep dive with each new client to find out what they want to achieve – it is important to understand the undercurrent as to why. Rental vacancies are sitting below 2% nationally and less than 0.3% in Adelaide, so chances of your investment property sitting vacant for long is at an all-time minimum.”

Andrews said brokers need to sit down with clients who want to purchase an investment property to work out their goals and objectives.

“As brokers, we need to explain to our clients how we are using the equity in their own homes to make this happen. We need a good understanding of their tax position, explain the difference between positive and negative gearing and how this can build their investment property wealth,” she said.

“By understanding the clients overarching objective and educating them around investment properties, it will help them to achieve that goal.”

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Andrews’ advice to brokers working with clients in this position was to be clear on their overall financial position.

“Investment properties are a calculated business decision,” she said.

“As brokers, we need to make sure we understand every facet of our client’s financial situation, so we are in the best position to help make this happen for them.”