5 Ways That You Can Leverage Mortgage Financing to Build a Real Estate Investment Portfolio
February 15, 2022 | Posted by: Ronice Harrison
Real estate may be one of the most important investments that you will ever make. It is not just a building or a home of your own. When you leverage mortgage financing to build a real estate investment portfolio, it can also be a useful means of increasing your financial well-being.
So, if you're getting into the real estate game and are wondering how you can make use of investing in homes to improve your net worth, here are FIVE ways you can leverage mortgage financing into a real estate investment portfolio that will make you proud.
Build a Real Estate Portfolio with Mortgage Financing
If you have $40,000 to invest, you might be thinking that you’re out of luck if you want to buy a real estate property… but you’d be wrong!
Mortgage financing is the key to building real estate wealth, because it lets the MORTGAGE LENDER make the investment for you. All you need is a 20% down payment, and you can start building your real estate investment portfolio TODAY.
So, with $40,000, you could be the owner of a $200,000 home. Not bad, right?
But, you might be asking, what if you already have $200,000 to invest? What’s the purpose of a mortgage, now?
Well, imagine these two scenarios.
- You invest $200K into one home, earning you $2,000 a month, with no mortgage. So your TOTAL INCOME is $2000/month.
- Instead of investing it all into one home, you invest $40K into FIVE homes, and EACH pays $2000 a month. Sure, half will go to the mortgage payment. But, your TOTAL INCOME in this case is still $5000/month!
As you can see, mortgage financing is a great way to increase the returns of your real estate investment, and build a real estate investment portfolio in record time.
If you want to see how much you could borrow for your next real estate investment, it takes less than 1 minute to fill out the pre-approval form at AQRE Lending and find out!
Take Out a Home Equity Line of Credit Loan
This one is for those investors who already own at least one home.
Also known as HELOC, this is the type of loan that lets a homebuyer borrow the equity of their home while they are still paying off their mortgage!
Does that sound too good to be true? Well, it’s not.
This is how it works:
As you pay off your mortgage, you increase your “home equity”. This is the amount of your home that you already own.
All that money that you have paid into the home is available automatically, without ever having to apply for it. This allows those who invest in real estate to borrow against equity to renovate the property or pay for a deposit on another property.
This way, you can leverage your HELOC loan into a sizeable real estate portfolio.
To learn more about the HELOC get in touch with our mortgage partners at AQRE Lending.
Pick Properties That Will Appreciate in Value
It goes without saying that most people want to invest in properties that will increase in value. But as an investor, you need to be ESPECIALLY careful about what you invest in.
If the value of your home decreases, you may have problems paying all your property fees. So try and be aware of future market trends and buy your investment properties in neighborhood hotspots.
You should also diversify the properties you invest in and include a buffer in your payment plan so that even IF the market takes a turn, you can still pay off your mortgage.
Then, you will never be at risk of losing your home, and your real estate investment portfolio will continue to grow.
What properties are set to appreciate? Our team believes that Memphis, TN, Arizona, TX, and most south-eastern US states are set to grow in value in the coming years!
View these areas and more, at AQRE Home.
Take Advantage of Appreciation with Mortgage Refinancing
Do you own a home that has increased in value? Congratulations! There are many financing options open to you to take advantage of this increase in your net worth.
For one, you can take out a HELOC (discussed above) for the amount that your home has appreciated.
OR, you can re-finance your existing mortgage on that home, borrowing the new amount (at the same low interest rate).
Then, you will have the cash to invest in other real estate opportunities, renovate the property and grow its value even more, or pay for a deposit on another property.
In all, mortgage financing offers you many ways to leverage your home equity to build a real estate investment portfolio.
To learn more about Mortgage Refinancing and get approved today, visit AQRE Lending.ca.
Invest In Homes Under Market Value
There are few better ways to improve the return on your real estate investments than buying a property that is under market value.
Not only will you have automatic appreciation with the purchase price, but you will also be able to INVEST that money into improvements in order to bump up the market price even more!
While finding this type of property can be difficult for the newcomer, looking for neighborhoods with potential for properties that require little maintenance can be a good place to begin!
Leverage Mortgage Financing to Build Real Estate Wealth
There are few better things to invest in than real estate, but it can be hard to know where to put your money in the beginning.
Whether through a home loan or purchasing a property under market value, there are plenty of ways to bump up your net worth.
If you're currently considering an investment in real estate, you may want to contact one of our mortgage professionals at AQRE Lending for more information.
Or to browse properties that fit your appreciation and market value criteria, browse the hundreds of homes for sale on the AQRE Home real estate marketplace!
- 5 Ways That You Can Leverage Mortgage Financing to Build a Real Estate Investment Portfolio