By refinancing your current home, you’re able to tap into the equity and use those funds to put down a deposit for another property. This is how many property investors have been able to purchase multiple properties from just an initial deposit.

However, there are some things you need to factor in. Just because you have equity doesn’t mean you can automatically tap into it. You still need to have enough income and the borrowing capacity to qualify for finance. You also have to remember that you will need to qualify for finance to cover two mortgages – your first home and your investment property.

Ideally, the money that you spend renovating the home will increase its value above the cost of the renovation. That way you are not only using the equity to pay for the renovation, but your total equity is actually increasing too.

You will again have to qualify for finance based on your income and expenses. It’s also worth noting that you will need to do your research to determine if undertaking a renovation will in fact increase the value of the property. The best way to do this is by comparing similar homes in your area to see what a newly renovated property of similar size, age and land component have sold for recently.