What can I do with equity? I recently bought a house and paid 50% of it upfront (400k) and borrowed the rest from the bank. Can I do anything with the equity in the house?
What can you do with equity?
johndowy on 11/09/2014 - 23:24
Comments
Give it to me?
JK. Invest it how you like. Just don't use all of it at once though, because if you lose it then you obviously have to pay it all back and risk losing your house.
Scratching my head as to how you saved up 400k somehow but then not sure of what to do with it? Inheritance or one of those mining boomers that earned $500k for driving trucks etc?
When I posted my comment I was torn between two thoughts:
- How in the hell did this guy get $400k saved up and not understand the concept of 'equity'? and
- Maybe he just wanted to brag about how much he has?
I'd borrow against it and buy an investment property in a "developing" suburb; i.e. one where houses are currently relatively cheap. Those tend to be the houses that eventually experience a "boom" in value at some point, when the suburb becomes more developed/established/acquires "infrastructure". Don't buy an investment property in one of the old, established suburbs near the city; some of those actually go down in value some years.
Anyone remember those "Equity Maaate! - buy a boat just like your neighbour except bigger!" CBA ads?
Im in the same boat. I have have over $500K in equity and its just doing a measly 5%. Whats a good investment out there?
IMHO 5% at the moment is not a bad return and has nearly 0% risk.
If you want to buy an investment property - i would talk to the bank or a good broker first.
Find out what your financial situation is .. how much the bank is willing to let you take out (in terms of equity) and how much loan you can additionally afford to put to that investment.You could either buy one investment property (probably save on LMI), or spread your deposit and buy 3,4,5 … in this case, LMI is your best friend.
If your not that way inclined (property isn't for everyone) .. take some out, put it in shares (or an index fund - eg. STW) , or just leave your equity there and keep paying off your loan.
all in all .. you've got lots of options , what matters most is that you're comfortable with what you're doing with your money.
Well… you could borrow against it.
Is that what you are after? Congrats on having that much to put up against the house.