Hi SS members,
My wife and I are in the process of looking to build up our portfolio of properties and currently own 1 investment property that has equity to draw down from.
I would like to get some feedback and honest opinions on the pros and cons of using say 10% equity compared to say 50% equity as deposits for investment properties.
What I'm confused about is if:
We have equity of $100K and we use it for the following scenarios:
1. 10% deposits using 100K would allow me to purchase $1million worth of properties compared to
2. 50% deposit using 100K would allow me to purchase a $200K property.
After speaking to some family members they are recommending us to put down 50% equity instead of say 10%.
Essentially wouldn't I be borrowing 100% of the total amount anyway, since I have to pay interest on the equity (deposit) and the new loan as well? Is that how other property investors are able to buy multiple properties?
What are the risks involved?
Appreciate any comments and opinions.
Thank you
-Tyrone
My wife and I are in the process of looking to build up our portfolio of properties and currently own 1 investment property that has equity to draw down from.
I would like to get some feedback and honest opinions on the pros and cons of using say 10% equity compared to say 50% equity as deposits for investment properties.
What I'm confused about is if:
We have equity of $100K and we use it for the following scenarios:
1. 10% deposits using 100K would allow me to purchase $1million worth of properties compared to
2. 50% deposit using 100K would allow me to purchase a $200K property.
After speaking to some family members they are recommending us to put down 50% equity instead of say 10%.
Essentially wouldn't I be borrowing 100% of the total amount anyway, since I have to pay interest on the equity (deposit) and the new loan as well? Is that how other property investors are able to buy multiple properties?
What are the risks involved?
Appreciate any comments and opinions.
Thank you
-Tyrone