If you own a home in Ottawa, chances are that the value of your home has gone up by a significant percentage over the last couple of years.
With that in mind, it’s as good a time as ever to take the plunge and start building your real estate investment portfolio using your newfound equity.
Using your home’s equity can help you not only develop a standout real estate portfolio, but it can also help you generate and build wealth.
Read below on how to build wealth using your home as a tool!
Home equity is the difference between the value of your home, and how much you still owe on the home’s mortgage. Home equity increases as you pay down your mortgage or if the value of your home increases.
Although you may have built up some equity in your home, it is locked away if you don’t use it, or until you sell.
As equity builds up, you can use this towards a downpayment on a new property. This property can then be leased or rented to tenants who will be paying you cash every month that will help pay off your mortgage.
There are multiple benefits to using your equity built for the downpayment on a second property.
The obvious is that your tenants will be paying off your second property’s mortgage by simply paying you rent every month. The less obvious reason is that real estate is an investment and your new rental place will also continue to appreciate during this time. This benefits you in two ways, in both the short and long term.
Once you’ve done this with one property, you can also expand your real estate portfolio to multiple homes, paying off the downpayment with the equity built in the rental properties before it, creating a sort of self-sustaining portfolio that can help you build incredible wealth.
Many savvy investors take this route, which helps sustain them and their families over the years.
At LIFE, we love empowering our clients whether that’s in the confidence to invest in properties or simply helping them find your next nest in your ideal neighbourhood. With a team of professional experts trained to help you find success, we would love to help explore your options in the market today.