Low interest rates have encouraged many people to invest in investment properties. Your current loan may have had very attractive conditions initially, but now your mortgage may be less financially favourable, due to rising interest rates. In times of falling rates or increasing property values, refinancing on investment properties tends to be more financially attractive because it enables you to leverage your property’s equity, lower repayments and increase cash flow.

Increasing Your Cash Flow

Refinancing the mortgage on your investment property can greatly increase your cash flow, by enabling you to convert the equity (if significant) in the property into cash via “equity release” refinance. If you increase the term of your loan and lower your monthly repayment, you may be able to further reduce your repayments, thereby increasing your cash flow. The Your Local Finance Loans Rate and Payment Calculator can be used to work out your property’s equity and the best loan for your financial circumstances.

Upgrading Your Property and Raising the Rent

You can used the equity in the investment property to fund improvements to it and thereby increasing its market value, which enables you to put up the rent. Refinance could fund:

• Upgrading floors, doors, and kitchen appliances and cabinets.
• Adding heating and air conditioning
• Increasing living space by extending rooms
• Upgrading bathroom tiling and fixtures.
• Re-painting of the interior and exterior.

We even had one Your Local Finance client who refinanced to build another floor on his investment property, adding over 32% value to it.

Buying an Additional Investment Property

An equity release refinance from your existing investment property can enable you to further invest in property. Because the equity rises with each year, you may have substantial funds available for reinvestment. This can be reinforced by rising property values. A Your Local Finance Home Loan Expert can advise you further on using your property’s equity to acquire more real estate.

Spending Your Money on Other Things

You can use your property’s equity to fund other things such as:

• Investing in shares.
• Loan refinance for debt consolidation.
• Increasing your superannuation for retirement.
• That once-in-a-lifetime overseas holiday
• Buying a new car, boat or campervan.
• School fees and further education for your children

There are many ways that refinancing your investment property can provide you with a better lifestyle. It is a good idea to get some financial advice on the best strategies to take.