Use Your Home Equity to Buy Property

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Did you know that you could buy multiple investment properties using your home’s equity—without needing massive savings?

Many investors miss out on this powerful strategy, relying solely on traditional savings to fund their deposits. Savvy property investors leverage their existing equity to accelerate their portfolio growth, reaching financial freedom much faster.

In this guide, we’ll break down:

1. How equity works and grows over time
2. How to use equity as deposits for multiple properties
3. A step-by-step comparison: saving vs. equity leverage
4. The strategies successful investors use to scale to 5+ properties

If you’ve been wondering how to fast-track your property investment journey, this is for you. 

Let’s dive in!

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Understanding Equity and How to Use It

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Equity is the difference between your property’s market value and the outstanding loan amount. As property values increase, equity builds, allowing you to borrow against it to fund future investments.

Instead of saving up for each deposit manually, you can use your home’s available equity to:

• Secure deposits for additional properties
• Expand your portfolio much faster
• Maximize capital growth returns

Now, let’s compare traditional saving vs. leveraging equity to see which strategy builds wealth more efficiently.

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Option 1: Traditional Saving for Property Investing

A traditional approach requires:

• Saving a 20% deposit for each property
• Waiting several years before buying again
• Buying one property at a time

For example, if you wanted to buy a $450,000 investment property, you would need:

• $90,000 for a 20% deposit
• $20,000 for costs (stamp duty, legal fees, buyer’s agent, etc.)
• $110,000 total upfront cash

Now, if you wanted to buy five properties, you would need to save over $550,000, which could take decades.

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Option 2: Using Home Equity to Buy Investment Properties 

Instead of spending years saving for deposits, a smarter way to grow your property portfolio is by leveraging your home equity. Here’s how it works, step by step:

1.Save an initial deposit – Start with $75,000.
2.Buy your first investment property – Purchase a $450,000 property with a 90% loan-to-value ratio (LVR). LVR (Loan-to-Value Ratio) = The percentage of a property’s value that the bank will lend you. A 90% LVR means you only need a 10% deposit.
3. Wait for property growth – As your property increases in value, your equity grows too.
4. Extract usable equity – Use the newly built equity as a deposit for your next property.
5. Repeat the process – Continue reinvesting equity to scale your portfolio efficiently.

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Using Equity to Fund Your Next Property

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If your $450,000 property increases in value by 12% in one year, here’s what happens:

• New property value: $505,000
  
• Original loan balance: $405,000
  
• Total equity gained: $100,000

But banks typically lend up to 90% of the property’s new value, meaning you can access about $61,194 in usable equity. This can be used as a deposit for your next property—without needing to save another large lump sum!

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Saving vs. Using Equity: Which Builds Wealth Faster?

To see the impact of leveraging equity, let’s compare two approaches over 12 months:

Option 1: Traditional Saving Approach

• Own 1 property worth $481,500 after a year
• Total cash invested: $110,000
• Equity growth: $33,705

Option 2: Leveraging Equity

• Own 2 properties worth $967,000 in 12 months
• Total personal savings used: $88,805
• Equity growth: $117,320

Key Takeaway: Using equity allows you to achieve 3.48x greater returns compared to relying on savings alone.

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How This Strategy Helps You Scale to 5+ Properties

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This is how successful investors rapidly grow their portfolios—scaling to 5, 10, or even 15 properties. As your portfolio grows, so does your equity. With the right loan structure, you can fund multiple properties each year.

But to execute this strategy successfully, you need expert guidance and a structured plan.

Most investors waste years saving for each property—while prices continue rising. Here’s what you need to unlock property wealth faster:

1. Properties with strong capital growth potential – Equity growth only works when your properties appreciate in value.
2. An experienced mortgage broker – To ensure loans are structured correctly for equity access.
3. A property buying team – To identify high-growth, high-yield investment properties.

If you’re ready to leverage equity and build your portfolio efficiently, book a FREE strategy call with Search Property today.

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