Want to know how property investors can buy properties without saving up for years to put down a deposit?
It is because they use a tactic called leverage: this means they use the equity generated by the rising value of an existing property to purchase a new one. This property then grows in value, allowing the investor to repeat the process and buy again.
The concept of leveraging is borrowing to increase the potential return of an investment. Taking out a mortgage to buy a home for example is a form of leverage.
To leverage the equity in an existing property ( home or investment) all depends on the value of that property growing while the size of the mortgage reduces or stays the same. By using equity in an existing property allows you to get into the market today and buy at today’s prices, benefiting from the coming years growth.
Here at IPPA, our role is to help our clients by giving the best advice to help them manage this process efficiently. We want to see our clients have a portfolio of investment properties and watch their wealth grow with them, with our constant guidance and support.
We believe it is important to have a clear strategy when leveraging equity to buy investment properties. Researching potential purchasing throughly is essential to avoiding a bad investment.
Call us today to organise your free consultation, we can’t want to hear from you!
