Real Estate

Leverage or cash which is better?

By From page HS3 | May 10, 2013

Leverage has always been one reason folks buy real estate. It allows homebuyers to own and control an asset worth hundreds of thousands of dollars for as little as a 5 or 10 percent down payment. Try that the next time you decide to purchase a few shares of stock, municipal bonds or commodities. Leverage allows buyers to use a small amount of their own money, with the lender providing the majority. This benefits both buyers and sellers. Imagine what would happen to property values if there were no leveraged lender financing. All sales would need to be either owner financed or cash sales. A frightening thought.

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Ken Calhoon

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