What is trapped equity and why might it be holding you back? Let’s discuss.
While the amount of equity you’ve got built up in your property might contribute to your overall net worth, it doesn’t actively make you money. This is where the concept of “trapped equity” comes into play.
In short, trapped equity is personal wealth that is tied up in an asset, like your home, and can’t be “released” unless you sell or refinance. Even if you’re using the property as a rental instead of a primary residence and are therefore generating positive cash flow, selling or refinancing are still your only means of accessing the home’s full value.
In short, having trapped equity in a property isn’t a bad thing, but it definitely isn’t conducive to certain goals. If you want to increase your net worth more quickly, then please reach out to us about how your property’s trapped equity might be holding you back from further growing your wealth.
If you have any other questions or would like more information, feel free to give us a call or send us an email. We look forward to hearing from you soon.