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
Enhancement of a property's value even though the improvement is not on it. Lighting in the street would be an example. ...
Through real estate properties, many individuals of varying degrees of expertise find ways to make money. The real estate industry allows these practices as real estate properties are ...
Among other things. Inter alia is an ancient method of referring to statutes without reciting all of their provisions. ...
See effective tax rate. ...
A landowner may not divert or redirect a natural occurring waterway from his or her property causing damages to another property. Waterway is normally construed to mean streams and rivers ...
Location Analysis is the appraisal of a general geographic area for a particular use. A Residential Real Estate Market professional (or consumer) rarely deals with a Location Analysis ...
The amount of money a developer must directly invest in order to obtain a development loan. It pays for the initial development cost including costs for items such as architectural plans, ...
Person's sole ownership of real property. ...
Insurance contract providing coverage for risks primarily associated with negligence and acts of omission associated with third-party injuries or property losses. Property and casualty ...
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