Buying an investment with borrowed money is also known as ‘gearing’.
The rent from an investment property is used to help make repayments on your loan. Equity in your own home is often used as security, enabling the purchase of the investment property.
For many investors, the objective is to service the loan with repayments that cover interest only. Investors hold out for an improved capital value (or capital gain) when they eventually sell. Others seek to repay the debt on the investment property to reduce the overall investment risk associated with the strategy and gain equity.
The repayments and other expenses are generally tax deductible and have the potential to reduce the amount of income tax that you may pay. You can borrow money for investment purposes as an individual, jointly or through a trust.
QInvest LoanFinder mortgage brokers will work with QInvest financial advisers and your tax professional to provide you with solutions on any kind of investment that uses equity in your home.