Leverage In Real Estate Investing
Use of other people's money (OPM) in an attempt to maximize the return but at high risk. The use of leverage in real estate investing is a way to maximize yield on a small down payment. When building real estate wealth, leverage helps one grow fast without extreme risk. High-leveraged investing in real estate is particularly beneficial in a highly inflationary environment. The best scenario is when property values increase on their borrowed fund. Property values can also decrease such as that which occurred in California in the early 1990s. A risk is negative cash flow in which income from highly leveraged property may be inadequate to pay operating expenses, interest, and principal.
Popular Real Estate Terms
A simple box-shaped house with clapboard siding and a gable roof. ...
The Multiple Listing Service (MLS) is an exclusive database of properties created by real estate agents and brokers. The idea behind the creation of the Multiple Listing Service (MLS) ...
Opening in the wall of a structure to let in air and light. ...
Metropolitan locality such as a city. It is heavily populated with many residents and businesses. An example is New York City. ...
The American Institute of Real Estate Appraisers, in short, the AIREA, or the Appraisal Institute as it is known nowadays, is an institute that aims to advance professionalism in the real ...
Listing Agreement A.K.A. Listing is basically a contract allowing a real estate agent or broker to list a home for sale and act as the home seller agent representing his/her interests ...
An accessory building is an outdoor structure used by the occupants of the main building or house. They have different functions and can be detached or attached to the main building on the ...
Reducing real estate investment risk by acquiring diversified holdings. ...
A rental contact in which the tenant's rental is tied to a change in the price level, such as the Gross National Price Deflator. ...
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