What is leverage?
The use of borrowed money (debt) to finance part of a purchase. It magnifies returns when the property’s return exceeds the cost of debt, and magnifies losses when it does not.
Where you will use it: this term comes up in the Real Estate Finance course, and the full course glossary collects every term in one place.
Related terms
From the free Real Estate Finance course by Devon Coombs, CPA, MBA.