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

Поделиться
HTML-код
  • Опубликовано: 29 окт 2024

Комментарии • 96

  • @PersonalFinancewithRaviSharma
    @PersonalFinancewithRaviSharma  3 года назад +3

    How much passive income I make? 👉 ruclips.net/video/1cI8hBp88pY/видео.html

    • @julianneannie3463
      @julianneannie3463 3 года назад

      Bitcoin is defying all laws of nature and TA in this new era with many speculations and many predictions gone wrong, it's outrightly wrong to just sit back hodl and wait maybe incur some losses along the line, that's a wrong mindset for an investor because as an investor finding ways to always increase and stack up more coins thereby making prof!ts should be the way of life, even experienced traders are in a doubt to take long or short position. People who invested in Bitcoins at the beginning or even in 2013 or 2015, when Bitcoin was crashing, have now become millionaires. I have been more skillful than lucky. Thanks mainly to the good time, my initial investment was multiplied by 5 In two months. After getting in touch with Carlos_andrewfx, an exp:ert in cryptography, who showed me how to use his program to make transactions and got 14 bitcoin in 2 moths with him. if you are looking for a way to increase your portfolio or investment reach out on him on Instagram
      @Carlos_andrewfx on ig

  • @davidt8274
    @davidt8274 5 месяцев назад +2

    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.

  • @erlan4953
    @erlan4953 2 года назад +5

    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.

  • @OrdinaryManSisu
    @OrdinaryManSisu 2 года назад +7

    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!

    • @clarencecrowcarter
      @clarencecrowcarter 7 месяцев назад

      They will sell it AT market price. They aren't stupid, but they aren't patient.

  • @wellerandre236
    @wellerandre236 3 года назад +14

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

    • @julianneannie3463
      @julianneannie3463 3 года назад

      Bitcoin is defying all laws of nature and TA in this new era with many speculations and many predictions gone wrong, it's outrightly wrong to just sit back hodl and wait maybe incur some losses along the line, that's a wrong mindset for an investor because as an investor finding ways to always increase and stack up more coins thereby making prof!ts should be the way of life, even experienced traders are in a doubt to take long or short position. People who invested in Bitcoins at the beginning or even in 2013 or 2015, when Bitcoin was crashing, have now become millionaires. I have been more skillful than lucky. Thanks mainly to the good time, my initial investment was multiplied by 5 In two months. After getting in touch with Carlos_andrewfx, an exp:ert in cryptography, who showed me how to use his program to make transactions and got 14 bitcoin in 2 moths with him. if you are looking for a way to increase your portfolio or investment reach out on him on Instagram
      @Carlos_andrewfx on ig

  • @henrynguyen4315
    @henrynguyen4315 2 года назад +8

    Youd actually need to have an increased salary for this to work if youre taking on multiple mortgages.

    • @julianvelay5260
      @julianvelay5260 2 года назад +1

      You can use rent in the investment property as income

    • @rickyarfi4060
      @rickyarfi4060 Год назад

      @@julianvelay5260 would just the rent be enough extra income to take on further loan ?

    • @uberboiz
      @uberboiz Год назад

      @@rickyarfi4060 I highly doubt it.

  • @davidt8274
    @davidt8274 5 месяцев назад

    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.

  • @hansel5602
    @hansel5602 2 года назад +3

    love your content! looking forward for your next videos

  • @stefanosmihelakis8591
    @stefanosmihelakis8591 7 месяцев назад

    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!

  • @tonyaquino_photography4838
    @tonyaquino_photography4838 Год назад +3

    Hey mate love your Chanel👍🏻 my question is tax!
    If you strive to own the property with no debt you positive rental income will be taxed as income🤷🏻‍♂️ so would it not be better to never own the property and take tax free money as income but obviously leave a buffer of equity for up and down markets in the future? What are your thoughts

    • @Borkstar7
      @Borkstar7 9 месяцев назад

      Makes sense

  • @sjshar1510
    @sjshar1510 6 месяцев назад

    Awesome video! So informative and clearly explained 😊

  • @ninasnook3111
    @ninasnook3111 2 года назад

    awesomje video helping to understand a really difficult concept !!

  • @jpll5550
    @jpll5550 2 года назад +4

    I noticed equity is only one part, the other part is your income, if your income is not enough the bank won’t lend it seems?? Even though my income is high end they say I still
    Don’t have enough to take on another loan?
    What u do then?

  • @rickyarfi4060
    @rickyarfi4060 Год назад +2

    Would tenants paying your existing loan be enough “ extra income “ to take on further debt ? Please help a newbie out here

  • @ricfraser7436
    @ricfraser7436 3 года назад +2

    So then how much equity would you need to buy another $300k house? Would the one property allow you to buy another house in 18 months given growth continues?

  • @karinabourne3465
    @karinabourne3465 2 месяца назад

    Question 🙋‍♀️ I bought my house at 276,000. It’s now valued at 510,000 with 238,000 remaining on the loan. How much is the equity. I’m not looking for a passive income with properties. I would just like a bigger home

    • @PersonalFinancewithRaviSharma
      @PersonalFinancewithRaviSharma  2 месяца назад

      Multiply the value by 80% and then minus the exisiting loan. In this case it would be $170k useable equity. If you need to refinance or upsize, reach out to sanjna@refyneloans.com.au

  • @gregorywatkins8160
    @gregorywatkins8160 6 месяцев назад

    Cash out refinancing on a investment property
    I own an investment property that is rent out. The current mortgage is $477k. I am looking to purchase a second investment property and trying to work out the best way to arrange the financing and the tax implications. Wondering how the tax deduction for interest would work if I were to refiance the mortgage on the first investment property to withdraw some of the equity. Would I be able to claim the full interest on the new loan, or would I have to split the interest into investment and equity. Eg. if the current loan is $477K, I take out $60k in cash for second investment property deposit, would I be claiming the interest on the $477k only (87% of the interest on the new loan) or on the $537k total (100% of the interest on the new loan)?

  • @JoseDownUnder
    @JoseDownUnder 2 года назад +1

    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 ?

  • @TheRushour23
    @TheRushour23 2 года назад +2

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

  • @Geekchess
    @Geekchess 2 года назад

    Great video mate - cheers!

  • @uberboiz
    @uberboiz 3 года назад +33

    Taking a loan against your home equity and calling it "tax free money" is make-believe, not to mention misleading. Home equity loan is a debt (not an income), and hence it's not taxable. And because it's a debt, you'll have to work your way to repay it eventually, plus interests (which in substance is similar to the lender 'taxing' you for using their money).

    • @Rekke_yt
      @Rekke_yt 3 года назад +2

      If you’re using the debt to generate income through investments, where you would have had to spend post tax dollars otherwise , it is tax free money .

    • @uberboiz
      @uberboiz 3 года назад +3

      @@Rekke_yt I think you missed my point. By nature, any debt shouldn't be subject to tax in the hand of the debtor because it's a borrowed money, instead of an earned income i.e. the debt is not your own money to begin with, and you'll have to repay it at some point. That's why calling home equity loan (or any kind of loan) 'tax free' money is rather redundant whether you use it to generate income or not, and it's definitely not 'free' money either because it attracts interests.
      With regards to your example/scenario, the debt itself is not taxable, but the investment income is. You may argue in this case that the interest would be tax deductible, but it would simply reduce the tax on your investment income, instead of fully wiping it out (unless your investment return is less than the interests i.e. negatively geared, in which case the investment is probably not a profitable one to begin with, let alone using leverage/debt to invest in it).

    • @jeremywright5036
      @jeremywright5036 2 года назад +6

      Take two examples. One, I earn money, which is taxed, save up for a deposit. This is bad for two reasons. 1) it's being taxed 2) inflation is working against you.
      Now in the same scenario where you have real estate and it appreciates in value this increases your equity. This appreciation is ONLY taxed (as capital gain) when you SELL it. In the mean while, you can use it to borrow against the same as the deposit from the earlier example. Except in this case you paid no tax to accumulate your equity and inflation is working in your favour.
      Now if you have only one property and you live in it, yes it's your house. So what? Simply ensure any investment you make is profitable or at least neutral. Then it's not you, but your tenant servicing the debt. You, however, benefit from increasing equity in that property over time.
      What is this scenario? It's compound interest working for you. There are only two types of people in this world. Those who understand compound interest and benefit from it and those who pay it.

    • @uberboiz
      @uberboiz 2 года назад +3

      @@jeremywright5036 I'm not questioning the legitimacy of using equity to borrow more money. I'm simply saying calling it as a tax free money is a reach - anyone with a certain level of financial literacy can tell a loan is not taxable in the hand of the borrower because it's not even an income to begin with, hence the different tax treatment. In other words, comparing a loan to your salary from a taxation perspective is not a very meaningful comparison. If anything, it's just an excuse for certain people to borrow more money for whatever reason.
      The fact that any increase in your equity is not taxable (unless you liquidate the property) doesn't indicate any tax benefit or advantage - it's not taxable because it's just a paper gain. The same also applies to other investments (e.g. shares) where you won't have to pay capital gains tax unless you sell it.
      I also believe in the power of compound interest, but your example (i.e. equity in your property) is completely off the mark. Your equity is simply a mathematical function i.e. the estimated property price subtracted by your outstanding mortgage at a given point in time. It has nothing to do with the underlying value of the property (which, believe it or not, is not necessarily reflected in the price of the property) or compound interest. Can you plough your rental income back into the property as an extra acreage, bedroom, or even a brick? I guess you just created another type of people in the world - those who THINK they understand compound interest, but turns out to be clueless about it.

    • @jeremywright5036
      @jeremywright5036 2 года назад

      @@uberboiz Like it does EVENTUALLY but, its extremely slow and its taxed making it slower still. If you want fast compounding then your doing it as a business you control that is growing at that kind of rate, or POTENTIALLY bitcoin mining which can work... but is very risky in Australia since your dealing with unreliable suppliers, hostile banks and government and even after all that, its still taxed the same as anything else.
      The some what illusionary paper gains are simply from inflation and they cease when inflation ceases. Inflation also tends to come with higher interest rates, so, if your over extended, rents come down, property prices drop you might need to take corrective action BEFORE the bank does it for you. In the mean while though, you can covert these paper gains into actual control of more assets. Just need to be aware the cycle WILL shift and you will need to change strategy to account to adjust for that when the situation changes.
      Plenty of cases of companies able to leverage inflation gaining control of a lot of assets but being unable to hold onto them when the cycle shifted against them later.

  • @danwilde275
    @danwilde275 2 года назад +9

    Hi Ravi, if you unlock the equity in your house how does that affect the repayments of your original loan? I assume that will make your repayments much higher or is it possible to keep the same repayment but extend the life of the loan?

    • @travisanderson8458
      @travisanderson8458 2 года назад +7

      thats the part that they all miss...

    • @danwilde275
      @danwilde275 2 года назад +3

      @@travisanderson8458 Exactly, it turns out the interest on home equity loans are actually higher than on a regular home loan so it's not like you're getting some magical free deposit. Useful for some situations I'm sure but if you're already struggling to get a deposit, then tapping into your home equity won't increase your ability to service the debt on that equity loan unless you're buying a cash flow positive investment property. If you can find cash flow positive investments or have a very high income then you can go nuts with equity. Cash flow positive investments in Australia seem pretty few and far between days though.

    • @last_samurai6690
      @last_samurai6690 Год назад

      Negative gearing for u. Been a boomer bliss for the last few years when interest rates where near zero. Now I bet some will be in trouble now that the interest rates are going up and, for Nz, the govt has removed interest tax deductibility on most rentals. So on top of paying 2 to 3x last years interest, the landlord has to pay tax on that rental income.

    • @uberboiz
      @uberboiz Год назад

      @@danwilde275 Totally agree. That's why calling home equity loan a 'tax free money' is delusional.

  • @bobakzamani
    @bobakzamani 2 года назад +6

    Hi Ravi , i wonder whether 90% of the max borrowing capacity allowance has changed to 80% as my broker is saying banks changed their rule around 5 years ago to limit the investors.

    • @she2302
      @she2302 Год назад

      You can borrow up to 90% with most banks but you pay LMI = lenders mortgage insurance. If you borrow 80% you dont have to pay LMI and your LVR is 80

  • @varunimdr
    @varunimdr 5 месяцев назад

    How will we pay the EMI and interest on a new home?

  • @Rekke_yt
    @Rekke_yt 3 года назад +3

    Thank you so much Ravi what an incredible video . Appreciate it . By the way your sound effects are a bit too loud relative to your voice . Thank you for such an insightful video 🐐

  • @easemailboxes
    @easemailboxes 3 года назад +2

    H ow to find an ethical property investment adviser?

  • @barb73plants
    @barb73plants Месяц назад

    Do I need any cash using equity

  • @rosshammerton6370
    @rosshammerton6370 5 месяцев назад

    At the moment I have just built a new home and have a person willing to rent my existing home, I would like to do more to increase wealth for my retirement as I’m 57 years now , can you help or advise,
    I have have my to be rental home valued and in the process of valuing my new home now I can live in it and at the moment as a guess have equity off approx 600k
    How can I use this to my advantage , thank you ,

  • @d.j.z.j
    @d.j.z.j Год назад

    It you get 10 k growth each year-perth is only 6 to 8 percent- also if its cash flow positive doesnt it then increase your income by 10 k- therefore you need to pay more tax?

  • @vikasarora252
    @vikasarora252 Год назад

    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.

  • @lorieceldonaldson1950
    @lorieceldonaldson1950 2 года назад

    Thank you. Very good content.

  • @PrisellaAfia
    @PrisellaAfia 3 года назад +2

    new investor here so this may be a silly questions, can you still use equity if your paying interest only? & when you’ll you suggest to get a valuation after purchasing an investment?

  • @joelrojas3726
    @joelrojas3726 Год назад

    Hi Ravi I would like to have some advice about buying an investment property with my super I don't know if you can help me please let me know thanks

  • @exannuc
    @exannuc 3 года назад +3

    In my opinion this should not be allowed... but oh well might as well use the system

    • @Sebeerful
      @Sebeerful 2 года назад

      What do you mean “not allowed”?

    • @jc212
      @jc212 2 года назад

      ??

    • @seanstark7369
      @seanstark7369 Год назад

      This process of loans is how the entire banking system works and is also how new money is printed

  • @OllieYT23
    @OllieYT23 10 месяцев назад

    Good video thankyou for the tips, take out the little grey talking edits though

  • @theCris1968
    @theCris1968 3 года назад

    Very clear!! Thank you

  • @morwickchesterham3875
    @morwickchesterham3875 3 года назад +5

    Equitying... classic house of cards...

  • @mbrunocondello
    @mbrunocondello 3 года назад

    Top video!!

  • @agnosticpatriot
    @agnosticpatriot Год назад

    Didn’t make a sense to me how and why tax free?
    Sorry I just brought a house and fkd up

  • @pokemangoduo431
    @pokemangoduo431 Год назад

    Bro the way you’re explaining it is making it even more confusing 😅 cheese and Rice.

  • @easemailboxes
    @easemailboxes 3 года назад +2

    With all the multi millionaires being born in crypto, perhaps you could address the best path to growing a portfolio. A lot of these ppl don't have jobs or are on centrelink (covid has smashed employment) but they have millions. A video discussing how to efficiently leverage this cash while being legally tax adverse would be great.

  • @sanctuaryplace
    @sanctuaryplace 2 года назад

    Nice one.

  • @vikasarora252
    @vikasarora252 2 года назад

    No offense.. but why do I feel you are wearing the body suit from Orange is the new black 😜

  • @freesia.m7600
    @freesia.m7600 3 года назад +1

    Exit strategy!

  • @pratikmehtaau
    @pratikmehtaau 2 года назад

    I like it but need more information ❤

  • @iamaswan.mynameisclt6180
    @iamaswan.mynameisclt6180 Год назад

    The CBA has gave us 100% loan (100% leverage) by using the equity to buy my investment house - I appreciate your information, but at least now I know that this is this a possible option (I know that it could be a rare case according to you, but it is possible). I would suggest you to edit or remove that part in your clip as it could lead to a misleading.

  • @ibrailkhan4538
    @ibrailkhan4538 2 года назад

    Sound video lad...enjoy about to start mg journey with property market looking at how can reduce my tax income as I'm a high earner sick of paying over 60k tax a year. Can you recommend what your courses help looking at starting portfolio first getting my own property then getting another In 6 months. I actual like to buy a ton of land and build that was mg first thought but looking at all options I'm very serious in actioning this.

  • @DanEather
    @DanEather 8 месяцев назад

    I feel like you’re intentionally make this more difficult to understand than it really is, simply so you can plug your course.

  • @thienpham2431
    @thienpham2431 3 года назад +1

    exit strategy pls

  • @craZYbob317
    @craZYbob317 8 месяцев назад

    this video could have been 2 minutes

  • @ananddal
    @ananddal 2 года назад +3

    Hi Ravi, plz reduce or stop doing funny editings inside super serious topics. It just me. Thanks