Equity is one of the most powerful tools available to anyone looking to build wealth through investment property. Understanding how to access and use it effectively can accelerate your journey to financial freedom and help you live life on your own terms. At B.Invested, we help investors leverage equity with confidence. 

 

Why Equity Matters in Investment Property 

Equity is the difference between what your property is worth and what you still owe on it. For example, if your home is worth £400,000 and you owe £200,000, then you have £200,000 in equity. But not all of this is useable — lenders typically allow access to 80% of your property’s value minus any existing debt. 

 

Example: 

• Property value: $400,000 

• 80% of value: $320,000 

• Outstanding mortgage: $200,000 

• Useable home equity: $120,000 

 

That’s more than enough to use as a deposit on another investment property, particularly those that are positively geared. 

 

Getting a Strategy in Place for Your Property Journey 

Every action you take as an investor should be guided by a clear and deliberate strategy. Ask yourself: 

• Are you planning to use equity in your own home to help your children with a deposit? 

• Do you want to build a portfolio of 10 investment properties, have them pay themselves off through rental income, and generate a passive income for retirement? 

Regardless of your goal, leveraging equity through investment property is a smart step toward building long-term financial independence. 

 

The Importance of Monitoring Your Equity 

If you’ve been paying off a mortgage on your primary residence or investment property, chances are you’ve built up equity. But equity can fluctuate – it can “disappear” during market downturns. That’s why it’s critical to monitor it regularly and access it while you can. 

Tip: Keep track of your property valuations annually. Policy shifts or property market corrections could limit your ability to leverage equity when you need it most. 

 

Unlocking Equity: Cash-Out Refinance 

If you’re not quite ready to purchase your next investment property, consider a cash-out refinance. This involves refinancing your existing mortgage to access equity in cash. The funds sit in your account and — if structured correctly — you only begin paying interest once you use them. This allows you to be financially prepared without being rushed into a purchase. 

For more on how cash-out refinancing works, you may refer to this Money Saving Expert article on mortgage equity release. 

 

Timing is Everything 

There’s a strong argument for accessing your equity even if you don’t have an immediate plan for it. Property markets, lending policies, and economic conditions are constantly changing. What’s available to you today may not be there tomorrow. Acting during a growth cycle can put you in a better position to seize investment opportunities later. 

 

Stay Ahead with B.Invested 

At B.Invested, we advise checking your property position at least once a year — especially as your portfolio grows. Is there equity in one of your assets that could fund your next investment property? Can your money work harder for you? 

Inflation is always eating away at the value of dormant funds. By putting equity to work, you can continue building wealth and get closer to your goals. 

If you’re unsure where to start, or need help mapping out your property investment strategy, the Investor Relations team at B.Invested is here to help.