Using borrowed money to control a larger asset than your cash allows.
Leverage multiplies both directions: 20% down means a 10% property gain is a 50% equity gain — and a 10% drop wipes half your equity. Debt makes good deals better and bad deals fatal.
Example: $100k down on a $500k property that gains 10% = $50k gain on $100k = 50%.
FAQ
What is Leverage in simple terms?
Leverage multiplies both directions: 20% down means a 10% property gain is a 50% equity gain — and a 10% drop wipes half your equity. Debt makes good deals better and bad deals fatal.