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> Real estate is generally a "good" investment as it's considered a relatively safe way to get significant leverage

Leverage? People don't normally invest in property (normally involves taking out a loan) for the purpose of taking out another loan. That so called "leverage" is being used to buy the house...ie you don't have any leverage

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The leverage is the loan taken for the mortgage. If you have a $1M property, $900k loan. If the property's value increases by 5%, that's $1.05M, so you've made 50% returns on your $100k capital invested. That's leverage, the leveraging of $100k to get the returns of $1M asset.

> That's leverage, the leveraging of $100k to get the returns of $1M asset.

Obviously. But that's not leveraging real estate, that's just leveraging cash.

Leveraging real estate would be using the property as collateral for a loan larger than the property itself

Isn't it incredibly obvious in my first message that the leverage is on your deposit, and therefore leveraging the cash.

Nah cos you said real estate is a good way to get leverage...

If I own a house outright, and use it as collateral for a loan... this my friend, is "using real estate for leverage"

Going to the bank and asking for money so you can do the above is NOT "using real estate for leverage"... It's using your cash deposit for leverage

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