Borrowing money isn’t always a bad thing – debt can be a sensible way to build wealth

BOMIKAZI ZEKA

Debt, in some form or another, is part of our financial profiles whether we like it or not. And it can be a useful way to build wealth if it is managed carefully and wisely.

For example, you may borrow money from the bank to buy an asset – a resource of economic value that generates income from its productive use. Investment property is an example.

So investing in an income-producing property can be a good idea.

If you are already in the property market, the home equity you’ve accumulated – the share of the property value that’s yours – can help you buy a second property. This time, you may not need a deposit as big as the initial investment.

In the event that the rental market is booming and your tenants pay you more than what you repay on the loan, municipal rates and property manager