If you’ve built up some equity over the years, it may be time to look at the options your property may give you.
Here are four possibilities that we can help you with:
- You could buy an investment sooner Borrowing against the value of your home—which is one way you can access your equity—may enable you to buy an investment sooner than if you had to save the money. Owning additional assets could help you build wealth more quickly although borrowing and investing involves risks. You will need to ensure you can maintain all loan repayments now and into the future. Of course, you need to consider the risks involved first. For example, it’s important to understand that when you borrow against the equity in your property your overall level of debt increases. That means you’d have more financial responsibility and may also risk losing your property if you were unable to meet loan repayments.
- Potential tax advantages In addition to your investment potentially increasing in value over time, certain expenses related to owning the investment, including loan interest charges, are generally tax deductible. Plus, if you choose to invest in property, you may be able to claim depreciation on certain items against your taxable income.
- A possible extra source of income in the future Owning an investment gives you the opportunity to generate an extra source of income down the track. And certain strategies can help you pay off your home loan sooner using the income from your investments but you need to find out more to see if these are right for you.
- Take the first step to get the right advice While we all get tips from friends and neighbours, when a plan is this big, it’s worth talking to a financial adviser. Using property equity to invest with can be risky, but with personalised advice Strategies For Life Tasmania can develop a strategy to help you meet your financial goals.