Rental payments may act as a kind of savings program for investors, where the rent pays the outstanding debt and reduces the asset’s leverage.
Rental payments may act as a kind of savings program for investors, where the rent pays the outstanding debt and reduces the asset’s leverage. The key is to make moderate use of debt, finding a balance between risk and return and ensuring there is enough cash flow from rental payments to service monthly mortgage payments. Despite its potential risks, many investors may still find leveraging worth the risk.