Answer:
Leverage.
Step-by-step explanation:
Financing the purchase of an investment in real estate with a mortgage at the time of borrowing at a low rate of interest and investing in assets that earn more than what they cost puts you ahead of the game due to the concept of leverage.
Generally, one of the several and most effective strategies investors used for investing in the business of real estate is a leverage.
Leverage can be defined as the concept of using borrowed money or capital to buy property that would generally appreciate. When leveraging a property in real estate, investors borrow funds (money) from a mortgage (lender) at a low rate of interest in order to enable them purchase an investment property.
This simply means that, instead of covering the entire purchase price, investors resort to borrowing to finance the purchase of an investment property in real estate. The property eventually appreciates and they're able to earn more than what they invested initially.
For instance, if Noahbrap wishes to buy a property worth $1 million. He could go to a bank and borrow the sum of $650,000 and thus, Noahbrap would have to pay the additional $350,000 from his pocket.
However, if depreciation sets investors would run at a loss when leveraging.