HOW TO use Equity to buy Property in Australia | Personal Finance - Real Estate Investing Australia

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You're one of the best vloggers of real estate, I tried watching other videos but their explanation is just so hard to understand. Maybe its the way you speak, very clear and easy to understand. Thanks for sharing all your videos. I am now a subscriber.

love your content! looking forward for your next videos

awesomje video helping to understand a really difficult concept !!

This is too good Ravi. Can you please make a video on Exit Strategy. Thanks!

Very clear!! Thank you

Great video mate - cheers!

Awesome video! So informative and clearly explained 😊

Thank you. Very good content.

Top video!!

One thing to remember folks , if a bank says we can give you 90% of your equity , just remember never cross collateralise your principal place of residence. If market goes south and you can't service the loans the bank will force you to see your house even below market price to get their money back!

Good content mate..i reckon you've been watching Graham Stephan and Andrei Jikh editing looks very similar haha

I think it's the way it is explained. It's easier to say, "Just think that the bank will let you have a max debt total of XXX, aka 90% of your property value that you are borrowing against". The max debt immediately triggers the calculation of the left over 'equity balance' aka what you're calling 'useable equity', that can be borrowed. So lets say, regardless of anything extra, at it's simplest: You go get your property value assessed - it is worth $700k, doesn't matter how much you owe on it etc, the bank will allow a maximum debt of 90% that you can borrow up to, you then see how much more debt you can get based on the debt you already have.

Nice one.

Thank you for the advice. Can I use my parents property equity to buy an investment property ?

Hey Ravi. Is it good to max out the equity available while house prices are up? I have no current plans to buy an IP yet but might plan later but wanted to secure max equity which is now.

hey Ravi, i've been watching your videos and they've been very eye opening! thanks for that! Question, can you take out equity and put it in an offset account against your loan so you pay very low interest rate? So really in a away park the money there for as long as possible with out using it? Thanks In advance!

Basically, equity to buy property is only required if you have a limit on the debt the bank would allow you to borrow. I the bank allows you to borrow millions, then you only need this if you were trying to borrow more than millions. The benefit is that equity - specifically when collateralised, this accesible amount can be used for the deposit on the next property. This special characteristic makes equity loan serve a purpose. And technically, yes it is tax free money, but it is borrowed money which is already tax free, NOT interest free. And don't buy into negative gearing bullshit, it's easier to simplify than to confound with excessive ideas.

Is it wise to take out the equity if I plan to buy another house (for eg upgrade from existing home to a bigger one) say after 4-5 years (considering house prices are decreasing now) ? how to avoid paying interest for this equity amount ?

Exit strategy!