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How to use equity to renovate your investment property

What's the best way to get your bank to fund your renovation?

Renovating an investment property can open up a lot of options and increase your cashflow significantly.

When you have good equity in your property portfolio, it's a great way to add additional value, ensure you're meeting Healthy Homes compliance rules, and attract a great tenant.

There is sometimes a perception that funding renovations can be a bit of a challenge, but not with good planning, advice, and an adviser on your Team!

Here are some tips to help you navigate this process smoothly.

Reviewing Your Lending Position

For us at My Mortgage, one of the first steps in preparing for a renovation is to review your overall lending position.

This involves assessing your current loans and financial situation to ensure that you have the necessary equity, income, and overall serviceability to get your project underway.

It's also a good time to evaluate whether your current bank is the best fit for your needs.

Different banks offer different terms and conditions, and some may be more favorable for releasing equity and financing renovations, depending on your situation.

Similarly, it might be time to consider a different lending structure across your portfolio, or to re-visit your goals.

Planning Your Renovation

Let's say you're planning a $75,000 renovation on one of your properties. In an ideal world, you would have a fixed-price contract with a builder who is committed to completing the work on schedule and within budget.

However, we all know that this is not always possible.

If you're planning to manage the renovation yourself, generally your bank will want quotes from your contractors to do the work, along with a timeline and understanding of your experience in managing a similar project.

In many cases, a new bank is a good option as they are often more lenient with their requirements and will allow you to simply draw down a facility so you can pay as you go. 

Getting Professional Help

If you're feeling overwhelmed by the process of renovating an existing property and managing your investment portfolio, don't hesitate to seek professional help.

At My Mortgage, we specialize in making the renovation process as easy as possible for our clients.

We can help you review your overall financial situation, find the right bank, and secure the best deal for your needs.

Book a call below to chat through your situation, free of charge, and get your property looking ship-shape in now time!


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