Use Your Home Equity to Invest in the Adelaide Property Market

The Adelaide property market is ripe with opportunities for investors to leverage their current home equity and build their portfolio in one of Australia’s most promising landscapes. Equity is one of the most powerful tools that investors have at their disposal, yet many don’t realise the true benefits of its wealth-generating potential.

Indeed, with the current investment opportunities available in the Adelaide market, now is the time to access your home equity and use it as a deposit on your next property as soon as you can. At Property Club, we are dedicated to showing our members the best path forward for them to achieve the investment portfolio of their dreams. And the path we are going to share with you today is one you do not want to miss.

Why Invest in the Adelaide Property Market There has rarely been a better time to invest in the capital of South Australia than right now. There are several contributing factors to Adelaide’s astronomical rise as one of Australia’s hottest property markets. But with house prices up 24.8% over 2021 and rental returns sitting around 4-5%, it’s safe to say there are massive rewards waiting for Adelaide investors.

Adelaide has also established itself as one of Australia’s most liveable cities – attracting a wealth of new residents looking for a place to live. The city has exciting new architectural projects in development, bringing in more jobs, more people, and more potential tenants.

To find out more about the investment potential of this city, be sure to read our article on why you should invest in Adelaide.

What is Home Equity and How Can it Help Home equity refers to the amount of a property that you already own. Therefore, it is the difference between the current value of your property and how much you still owe in mortgage payments. If you own a property that is valued at $500,000 and your mortgage is sitting at $300,000, then you have $200,000 in home equity just waiting to be accessed.

While home equity takes time to build up, there are some ways in which you can generate it quicker. For example, extra repayments to your mortgage can significantly boost your equity and ensure there is more wealth stored away for your next investment.

It is important to note that there is a difference between accessible equity and usable equity. Looking back at our past example, accessible equity would be the $200,000 already repaid to the mortgage. However, the usable equity would only sit around $100,000, as the banks only lend 80% of your property’s current value – or $500,000 x 0.80 - $300,000 = $100,000.

While this is significantly less than your accessible equity, it is still more than enough to make a deposit on your next investment property.

Using Home Equity to Invest in Adelaide Property Because of the significant rise in Adelaide’s property market value over the last few years, investors are leveraging this boost to maximise their equity and build their wealth further. Here are some examples of how Property Club’s membershave made this work:

• Mr and Mrs B are Adelaide homeowners who have seen their property increase in value by $160,000 over the last two years. They have chosen to release $85,000 of their new equity to use as a deposit on a $500,000 investment property in Adelaide. They now have two properties sky-rocketing in value in a market that is only moving up.
• Mr and Mrs H built an Adelaide investment property in 2019 which has since grown in value by $258,000. This means their equity has also increased to $150,000 which they were able to use to build another investment property in Adelaide so they can continue building their wealth.

Join Property Club Today Property Club is dedicated to helping our members discover how their home equity can help them find wealth in the Adelaide property market. Become a member today by contacting us at enquiries@propertyclub.com.au.