Property strategy revolution for Sydney property owners

Do you have at least $200,000 equity in your Sydney property?  Are you thinking about buying an investment property to make your money work harder for you?

If you purchased your property more than three years ago, there’s a high probability your property has increased by more than 30%.  You’re probably working hard to pay the mortgage off, but the good news is that you can also put your equity to work to buy an investment property (or two).

Do this the smart way, and your investment properties can help pay down the mortgage on your home while building a property portfolio that will deliver lifetime income.

How much equity do I have?

Only a few years ago, most property owners would just be looking at normal re-sale values to determine the equity available for ‘re-use’.  These days, with all the re-zoning and infrastructure changes occurring in Sydney along with all our other cities, owners can be sitting on double or triple the value of their property.

For the moment though, let’s keep things as straightforward as possible.  Use the following steps to work out how much equity you have available.

  • Use one of the valuation sites (eg – to get an idea of the ballpark value of your property.
  • Note down the figure representing 80% of your total property value – this represents the ‘borrowing’ amount a bank might loan against your property.
  • Check the balance of your current mortgage – what is the amount required to pay out the loan?
  • Subtract the loan balance from the borrowing amount.

For example – if your property is worth $1,000,000 and you have a mortgage balance of $500,000, your ‘available equity’ would be as follows.

Of course, this is a very general guide but will at least provide some insight into your potential available equity figure.  Using our example, you would have $300,000 which could be used to cover the deposit and purchasing costs of one or more properties.  Other factors need to be taken into account – such as your ability to service the loan – but with a $300,000 equity base you have the opportunity to purchase income generating property that could supplement your existing income.

It’s easy . . right?

In theory, this approach seems deceptively simple.  Many homeowners believe if they have purchased their own home, they’ll easily be able to translate this experience into investment property purchases.  If this is your thought process, be very careful because this is where your plan can go off the rails.  And many get caught.

The Australian Tax Office (ATO) stats released earlier this year show that 1.4 million people own one investment property, but then don’t get any further.  Even more concerning is the fact that this number hasn’t changed much over the past three years, while the number of people who own more than one investment property is increasing at a great rate.

Based on the ATO data, approximately only 25% of the people who purchase investment properties successfully continue to buy and build their portfolios, and many of the remaining 75% fail to retain the one property they managed to purchase.


Serious opportunity

If you’re one of the lucky (and, let’s face it, truly clever) people who purchased in Sydney before prices doubled, you have the opportunity of a lifetime.  The price boom has the potential to set you up for life.

The other piece of great news is that we have multiple markets in Australia, so you have the opportunity to replicate your success and purchase other properties that will deliver good results.  Just make sure you join that 25% of successful property investors by considering the following points.

It’s NOT all about location

One of the biggest traps is to think that selecting your next purchase area is the only issue you need to get right.  Success in property is not about location – if it was all about location, then everyone who bought in a hot suburb would be successful, and that’s certainly not the case.

Plenty of people lose in markets on the upswing, and win in markets on the downswing.  This is evidenced by the number of people who sold out of Sydney too early and waited on the sidelines for the ‘bust’ that never arrived.

Sure, location is a consideration, but there’s many more components to factor in such as property type, demographics, changing infrastructure, re-zoning and lifestyle trends – just to name a few.  So how do you decide where and what to buy?

People and property need to match

The component most successful investors have in common is that they buy what they need, rather than copying what their next door neighbour purchased, chasing the latest ‘hot’ suburb or buying what the property marketers ‘sell’ them.

The biggest mistake we see unsuccessful investors making is that they don’t have a tailored buying approach.  The key to success is that people and property need to match.  This requires a lot more than just your ability to be able to purchase the property, but also your ability to add value and hold the property indefinitely or until you decide it’s time to sell.

Things become even more tricky when thinking about each property you purchase.  This is because each property requires its own strategy.  One property can be magic in the hands of a skilled investor, and a ticking time bomb in the hands of an unskilled buyer.

Property strategy revolution

In many respects, it is easier than ever before to build significant wealth through property but to do this takes considerable skill.  There’s an almost limitless amount of ways to achieve success efficiently, but the area has never been more complex.

The increased complexity has given rise to a new breed of wealth creators.  Working from a ‘people first’ approach the new breed of property strategists use a combination of client analysis, property expertise, finance, legal, accounting, economics, demographics and global trend analysis to deliver superior outcomes for their clients.

A good property strategist will help you make the most of your existing property, as well as design a tailored portfolio approach to enable you to continuously be in a position to buy when you want to buy, know what is best to buy, then buy it for you and advise on how to maximise each purchase.

So if you would like to use your hard won equity for maximum effect, ensure you find yourself a great property strategist . . then listen to and act on their advice.

Buy smarter = limitless ways to build lifetime income

Crave Property Advisory is a unique property strategy and buyers agent service. As the only independent and unbiased advisory that can help you use any property strategy Australia-wide, Crave’s services extend to home, investment and commercial property.  A highly client focused organization, Crave developed the Modular Investing System (MI System) to provide clients with the ability to use a tailored mix of strategies and efficiently build profitable portfolios that create lifetime income. 

Debra Beck-Mewing is the CEO of Crave Property Advisory, and has more than 20 years’ experience in property investing, Australia-wide. She has used a range of strategies to build her property portfolio including renovating, granny flats, sub-division and development. Debra is skilled in identifying development opportunities, and sourcing properties that have multiple uses and multiple exit strategies. She is a Qualified Property Investment Advisor, licensed real estate agent and also holds a Bachelor of Commerce and Master of Business.

Follow us on for regular updates, or book in for a strategy session to discuss your property questions.

Disclaimer – This information is of a general nature only and does not constitute professional advice.  We strongly recommend you seek your own professional advice in relation to your particular circumstances.

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