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
An adversary hearing allows both parties to an issue to present their views. A public procedure performed by an administrative or legislative body to investigate certain matters and ...
Section of the Internal Revenue Code applies to assets used in a trade or business,. In general, gains on section 1231 assets are taxed at capital gains rates, and losses are considered ...
Urbanized area in and around a major city. The metropolitan area may overlap county and state boundaries and may encompass a city, its suburbs, and the orbit of its social and economic ...
Agreement between the seller and buyer involving the terms of sale. ...
protective wall along a roof or below a terrace. ...
Small navigable body of water having limited water access and egress. Coves are often secluded and acts as a boating anchorage. Concave or cratered corner molding. A hollow cornice. ...
maintenance procedures conducted to prevent later repairs and furthering a longer useful life. For example, many boilers and burners are cleaned and serviced each year before the winter ...
Wedge-shaped step found on a spiral staircase with a wider tread on its outside portion. ...
Amount received when property is changed from one use to another. ...
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