Explanation
Magnifies both gains and losses. A 5% appreciation on a 4x-leveraged property creates a 20% return on equity.
Advertisement
Real Estate Term
Leverage
The use of borrowed capital to increase potential return on investment.
Real Estate Term
The use of borrowed capital to increase potential return on investment.
Magnifies both gains and losses. A 5% appreciation on a 4x-leveraged property creates a 20% return on equity.