How will the use of positive leverageQuestion30. How will the use of positive leverage benefit a real estate investor...? It will allow him to decrease the NOI It will allow him to increase the NOI It will allow him to decrease expenses It will allow him to purchase a larger buildingAnswer & Explan...
30. How will the use of positive leverage benefit a real estate investor...? It will
allow him to decrease the NOI It will allow him to increase the NOI It will
allow him to decrease expenses It will allow him to purchase a larger building
Answer & Explanation
The correct answer is: It will allow him to purchase a larger building.
Explanation:
1. Understanding Positive Leverage:
o Positive leverage occurs when the return on an investment property
exceeds the cost of borrowing (interest rate). This means that the
investor can earn more from the property than what they pay in
interest.
2. Impact on Purchasing Power:
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