When it comes to property investment, investors hope to have capital growth so that they can then use their increase in equity for further investments when their ready. But what is Capital Growth and Equity? Simply put: Capital Growth: the growth (appreciation) in VALUE of the investment property after its been purchased. Equity: (Very simply put) Is the cash that would go in your pocket after you sold your house and paid off the mortgage. (How much your house is worth - the mortgage = equity) So, you buy a property, and lets say it grew in value over 2 years by $100,000 (Capital Growth)- this extra $100,000 is considered to be equity that you could use! Simple enough concept right?
Posted on: Sat, 23 Nov 2013 23:45:07 +0000
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