Leveraging Your Home Equity to Make Creative Investment in 2023

Buying a home can be one of the largest personal investments that you can make. After all, leaving the life of rental payments and lease agreements behind in exchange for the freedom of homeownership can feel like a massive weight off of your shoulders. However, this tremendous personal investment also holds the potential to serve as a monetary investment as well. 

There are a variety of ways to take the personal victory of buying a home and nurture the experience into a profitable investment that can help you achieve new wealth as a real estate investor. 

So, if you are ready to begin, lets take a look at how owning your own home can help you invest in real estate through home equity.

But first, if you want to learn how to draw out home equity the right way, click the link below to book a free strategy call and gain access to our variety of equity tools to ensure you are drawing equity in the way that is best for you.

Leveraging Your Home Equity to Buy Investment Properties and Make Improvements 

One of the greatest tools that you can use as a homeowner is your home equity. This measurement of the value you have built in your home is capable of being leveraged and utilized in a variety of ways that can provide you with new opportunities to further invest in real estate. 

Home equity is earned by making payments towards your mortgage principal as well as through the property appreciating. Appreciation is the process where an asset increases in value over time or when something occurs to make it more valuable. In real estate this often comes in the form of renovations and improvements to the property, or investments in the neighbourhood making the property a more desirable place to live. 

Here are some of the ways you can leverage your home equity to buy investment properties and make improvements to existing investments: 


One of the most common options available to you if you are looking for a way to cash out on some of your hard-earned home equity is through a process that is known as a cash-out refinance. This allows you to take out a new mortgage agreement and receive some of your property’s equity in the form of cash which can be used to buy properties or pay for improvements on properties you already own. 

This can come at the expense of potentially raising your mortgage rates and increasing the amount of time it will take to pay off your mortgage but can be used as a great investment tool. 

Home Equity Line of Credit (HELOC) 

A HELOC is a line of credit that allows homeowners to borrow against their home equity up to a specified value over time instead of drawing all of their home equity out at one time. As well, during the draw period, the property owner is not required to make any payments towards the loan amount and instead is only liable for the interest payments. 

This makes HELOCs (Home Equity Line of Credit) a great tool for debt consolidation as well as investments as you can use the draw period to set up cash flowing investments to cover your repayments by the time you need to begin paying it all back. 

Reverse Mortgages 

Another option for older homeowners is the reverse mortgage. This allows you to borrow up to 55 per cent of the current value of your property to use as you wish. However, as long as you do not default on the loan, you are not required to repay the funds until you move out, sell the property or when the final borrower on the title for the property dies. 

This can be an excellent way to draw funds to buy multiple investment properties that generate income and equity while living comfortably in your own home. 

House Hacking to Create Cash Flow 

Another popular technique to use your home to further your real estate investments is house hacking. This is the process of renting out a portion of your primary residence in order to generate income and reduce your cost of living. There are three primary ways that people employ house hacking as an investment strategy. 

Discover How To Rent A Property With This Step By Step Guide

Single Rooms 

One of the methods that people use in order to house hack is offering single rooms for rent to students, travelling professionals or another tenant. This allows you to earn rental income from the extra space you have in your home. 

However, one of the main downsides of this tactic is the fact that you will end up sharing personal space with your tenants and they will potentially be able to access your personal items and interrupt your day-to-day life. 

Multifamily Living and ADUs (Additional Dwelling Units) 

Another method investors use to circumvent the problem with renting single rooms is by living in multifamily properties and renting out the additional units. 

This provides privacy and independence to all parties but can come with greater up-front costs – especially if you need to renovate a single-family home to add another dwelling unit. 

Short-Term Rentals 

If you are not interested in having a tenant in your home full-time, there is always the option of offering part or all of your property as a short-term rental. This can serve as a short-term variation of either of the previous forms, or you may rent your entire home out while you are away to earn additional income. 

Bonus: Using Your Home as an Investment After You Move Out 

If the time eventually comes and you move from one home to another, you may want to consider using your home as a rental property. If you have taken good care of your home while you were still living there, then you should have no trouble finding renters who would want to live there. This means you can continue to experience the value of the home you purchased, even after you have moved on to the next phase of your life. 

On top of using your home as an investment tool, did you know your mortgage can also be used as a vehicle to drive your investments? If you are interested in learning how to get investor-friendly mortgages today, give us a call at LendCity. Our number is 519-960-0370 or you can visit us online at LendCity.ca today. Alternatively, click the link below to book a free strategy call with our team today.

Thinking About House Hacking Set Realistic Expectation and Avoid These Pitfalls, w/ Scott Dillingham