Smart investors use finance strategies to build wealth and avoid costly mistakes
Many everyday Australians are sitting on untapped potential when it comes to their property portfolio. What separates average investors from those who build substantial wealth often comes down to one key factor: how they structure their investment finance.
InSynergy regularly sees clients unlock hundreds of thousands of dollars more in equity and future growth – and reduce risk – by applying advanced mortgage broking strategies. And yet, this is an area most investors overlook.
Whether you own one property or several, the right lending advice can profoundly impact your financial future. Here’s how.
1. Valuations can vary
It might surprise you to know that valuations from different lenders for the same property can vary by 10% to 30%.
Let’s say your Northern Beaches home is valued at around $2 million. If one lender assesses it at $1.8 million and another at $2 million, that $200,000 difference can significantly increase your borrowing power. While you
can’t use the entire value, lenders typically allow you to borrow up to 80% of the valuation, minus any existing debt. So, a higher valuation means more accessible equity to potentially leverage into your next investment.
Here’s an example: Accessing just $150,000 of that equity as a deposit and purchase costs for a $600,000 investment property (and keeping $50,000 as a safety buffer) could put you in a cash flow positive property that grows at 6% annually – that’s $36,000 in capital gains per year, not to mention the rental income.
Valuations aren’t just paperwork – they’re your launchpad for growth.
2. Lender policy
Not all lenders treat your income and debt the same way. Some assess borrowing capacity conservatively; others are more flexible, especially if you own multiple properties.
A strategic broker can help match your circumstances with lenders who:
- Accept more of your income (for example, bonuses, rent or self-employment).
- Offer higher borrowing power.
- Are more favourable for property investors.
The gap between lenders can be dramatic – you might be approved for $500,000 with one lender and $800,000 with another. That difference could fast-track your ability to diversify into multiple investment properties.
3. Loan structures
Loan structure is often overlooked but critically important. Done wrong, it can cost you hundreds of thousands of dollars over five to 10 years.
Some common, and costly, mistakes include:
- Cross-collateralising properties, which ties your assets together and increases risk.
- No loan portability, meaning you’ll pay extra fees if you move or refinance.
- Incorrect ownership structures, which may limit tax benefits or complicate future sales.
A well-structured loan isn’t just about today’s repayment. It’s about flexibility, tax efficiency, and risk management over the life of your portfolio.
Build your personal ‘advisory board’
You might already have a mortgage broker, accountant and financial advisor, but are they working together?
We often see accountants focus solely on short-term tax savings, while investors miss out on long-term wealth creation. Or brokers who aren’t experienced in property investment make recommendations that limit future borrowing.
The best results come when your advisors operate like a high-performance team, aligned with your end goal: financial independence.
Real-life insight
One of our clients, a mid-40s couple from Dee Why, used these strategies to refinance and revalue their home. With the added equity, they purchased two investment properties, one in Adelaide and one in Perth, both cash flow positive and tipped for long-term growth. They are now well on track to retire 10 years earlier than planned.
Don’t leave hundreds of thousands of dollars on the table. With the right guidance, you can maximise your equity, borrow smartly, and build wealth safely.
Richard Sheppard is the CEO and founder of inSynergy Property Wealth Advisory. inSynergy provides a broad range of professional services designed to assist with all aspects of property investment. Phone 1300 425 595 or visit insynergy.net.au
