How To Leverage On Real Estate
The common question that new real estate investors ask is how does leverage work when purchasing real estate? Leverage is a method of buying real estate with very little capital. With leveraging, you can purchase real estate that is worth so much more than you have in equity or total assets. In most cases, you can receive loans of up to eighty percent of the property's total value, sometimes higher. The reason you can buy real estate with low down payments is because historically real estate has been a safe investment, the last several years notwithstanding. Real estate is a great example of an investment that appreciates over time. This makes real estate a good long-term investment and even a short-term profit play for seasoned investors. For instance, if you want to purchase an investment property that is valued at 300,000 dollars you will typically need about 20% down, or $60,000 as an investor. That can be as high as 30% or as low as 10% in some cases. Investors who