Should you use a home equity loan to buy an investment property? Here's what experts say.

The average American mortgage holder currently has $299,000 in equity, $193,000 that's accessible, according to ICE's February 2024 Mortgage Monitor Report. If you're sitting on a sizeable amount and want to use it to buy an investment property, it could be a good idea but there are a few important pros and cons to consider first.

You may also want to consider waiting to tap into your equity until you have at least one investment property. 'My business partner took out an equity loan on his three-unit investment property and used that money as a down payment to purchase a nine-unit rental property. This is an incredibly wise decision as an investor because it greatly increases wealth while keeping a personal residence safe,' says Ryan David, the owner and lead investor of We Buy Houses in Pennsylvania.

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