Negative Leverage Real Estate Risks and Strategies

A husband-and-wife real estate investing team analyzing whether or not their rental property have negative leverage.

Negative leverage in real estate is a concept that can significantly impact investment returns. It occurs when the cost of borrowing exceeds the return generated by a property’s cash flow. Negative leverage happens when the operating cap rate is lower than the interest rate of the debt, potentially reducing overall investment performance. As a real…

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