The Power of Leverage

Property investment makes your money work harder.

 

Leverage is an investment strategy whereby the investor uses borrowed money to increase the potential return of an investment.

It enables investors to have more purchasing power in the market.

Leveraging increases potential gains, but it can also magnify potential losses. The way to minimise the risk of loss on any leveraged investment is to choose asset classes that are considered less volatile than others.

The short term nature of speculation also increases the risk.

Property is far less volatile than most other asset classes and is a long term investment.

The declining time value of money also means that in decades to come, the borrowed funds are less of a burden on the borrower.

Once again, it is a compelling reason to start investing as early as possible.