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Summary Question30. How will the use of positive leverage benefit a real estate investor...? It wi

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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 & ExplanationThe correct answer is: It will allow him to purchase a larger building.Explanation:1.Understanding Positive Leverage:oPositive 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:oBy using positive leverage, an investor can use borrowed funds to increase their purchasing power without needing additional equity.oThis allows them to acquire a more expensive or larger property than they could with their own capital alone.3.Relation to NOI and Expenses:oWhile

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Question


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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