Brackenfell - 021 982 0965
  Eersteriver - 021 902 0246
property-logo

Clients for life.

This is FPS.

USING EQUITY IN YOUR HOME TO BUILD A PROPERTY PORTFOLIO
Property buyers should not shy away from taking out multiple mortgages to maximise returns.

This is according to George Radford, Head of Africa at IP Global, who says that ‘remortgaging’ a property instead of selling should prove more lucrative over time as opposed to the short-term gain of a sale.

“Using this strategy, first-time investors can convert an initial capital investment into equity that can be used to buy more properties,” says Radford.

However, he says novices wanting to better understand the reinvestment cycle should seek expert advice in order to get the most out of their money.

“To explain the benefits, consider the example of ‘Tom’ who bought a property in 2009 with a 40% cash deposit and a mortgage. Since then, the value of the property has grown significantly, which means Tom's equity in the house is higher, while his mortgage remained the same,” Radford explains.

“If Tom sold the property, it would certainly make some money, but he would also have to pay Capital Gains Tax on the profit.”

Radford explains that if Tom opted to use the higher value of his property to get a new, larger mortgage, it would give him money to work with. “This is called releasing equity.”

“So, Tom now has a lump sum that he can use to diversify his portfolio and is able to invest in new properties in different markets to mitigate risk, each with their own mortgage,” he says.

Diversifying your portfolio unlocks options, and one of those possibilities is to begin the reinvestment cycle all over again.

Radford says the additional benefits of remortgaging include:

    An investor has the option of borrowing money at a low interest rate.
    You have the option of turning equity into cash.
    It affords you a degree of flexibility with your investments.


“An investor could amass a wealth of real estate properties over the years, which will pay dividends into retirement. Seasoned property investors the world over have done it, starting with just one purchase,” says Radford.

Read the original article Here
property-logo
icon
8A Gert Kotze Street,
Brackenfell,
Western Cape,
South Africa, 7560
icon
021 982 0965
icon
021 982 2509
property-logo
icon

23 A Plein Street,
Grand Central,
Eerste River,
Western Cape,
7100

icon

021 902 0246

icon
021 982 2509


ABOUT FPS PROPERTIES



Founded by Freddie P. Steyn in 2015, FPS Properties is one of the newest estate agencies in the Northern Suburbs of Cape Town. We are professional, dynamic and fully accredited estate agency. We strive to give all our clients professional and cost effective services to ensure that your property is rented or sold within the amount of time.

FPS Properties is supported by FPS Attorneys who will ensure that all transactions are correctly executed and furthermore will gladly assist with any and all legal queries to give you the added peace of mind.

Our agents are friendly and efficient and will gladly do free property valuations and provide sound property advice.

In short FPS Properties’ philosophy is simple… that by working closely with the client and becoming attuned to their business ethos, we can deliver pro-active and effective solutions thus creating ~ ”Clients for Life”

LEAVE US A MESSAGE