Hi guys,
As a new comer to investment property I just wanted to seek people’s tips and tricks as to how people build equity quickly. Thanks
We buy places that need work (renovation or rejuvenation) and do as much of it as we can ourselves. This means we typically get it for a good price, and the cost of the renos is far less than the amount of capital gain we get from doing the work.
In the good old days you just purchased any old property and they would grow in value. These days it is much harder, but still possible.
One of my mates purchased a $480k property and has had an offer of $580k even before he has settled. Without doing a thing to it.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Hi Nightelves,
There are many ways to do this. It depends on how much time you have, motivation, lateral thinking and knowledge. I will list a few ways that I know but I am sure there will be many people who can give you much better advice than I who will no doubt post on here.1. Buy at a good price. Knocking 20-50k off an averaged priced home is a great way to get that little bit ahead at the start of your
investing career.2. Buy in an area on the up. ie Hotspotting. Find an area that is about to have a project start or finish that will improve infrastructure. Or an area that is just about to boom due to market timing. Research is the only way to do this. If you wish to buy in an area that you live near due to familiarity buy the best that you can. You may find you make 100k equity in a year with this tactic.
3. Buy a property that needs a bit of cosmetic work. Maybe a property that needs a lick of paint, a new front fence an landscaping, simple bathroomkitchen tidy up or small renovation. By doing a cosmetic renovation it won't take up to much money as opposed to a full make over that will take up alot of time and money if you are inexperienced. Alot of cosmetic work you may find you can do yourself.
4. Buy a property on a large block you you may be able to subdivide and sell the rear block or keep it for yourself and look to build a second dwelling on it.
5. Using a good brokerlender. This sounds strange but different banks have different valuations come in. I recently had one bank value a property 50K more than another. To me this was alot of money that I can now use to move forward.
There are many ways. The forum is a great way to find out all the tricks you can use.
I hope this helps.
hi its simple when you know how through a combination of know how
a) subdivision battle axe block create more titles
b) adding value change garage into rooms add carport
c) add valuve new kitchen nee bathroom etc then revalue increases equity
d) use existing equity to purchase other investment property which multiplies
e) buy a book on how to add value to your homemartin
The equity is your interest in the property, as opposed to the bank's ownership. You build equity by making your payments. However, the bulk of your payments go for interest, interest, and taxes, and then principal. If the real estate market bottoms out and then rises, you can gain equity by merely holding property. However the gain in equity is not realized until/unless you sell the property or take out a loan on it, decreasing your equity.
My properties are in an area that has seen growth but it has been flat for the last few years. I have enough cash in a LOC to buy one more property
. I could have bought in another state that was still growing but didnt feel comfortable enough to do that yet.Buying a standard local property would mean no more until growth starts again.
Instead i bought a property that could be subdivided . Now after building i should be able to pull about $100,000 equity out straight away allowing me to buy again and again and again.
Cheers
Wow some fantastic comments in this forum. Thanks guys. I was looking at dual occupancy since my property has five bedroom. Four attached to the house and one shed that has been converted into a bedroom. However going down this road might be difficult because the owner who did the improvement did not have a building permit to build the shed into a bedroom. What are your thoughts guys. Should I take out the building permit and try to create my property into dual occupancy?
I can list the traits as the strategies are unlimited, being pro-active, having the right head space and being patient………
No money down deals are great. It saves your 20% deposit. You just need the 5% for legals etc. If you purchase in a reasonable capital growth area your equity will cover your 20% by the time it comes around to paying back the loan.
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