Real Estate Term

Leverage

The use of borrowed capital to increase potential return on investment.

Reviewed 9 August 2026 by Keiron Brown, Founder & Editor, CalculateRealEstateROI · Educational estimates only — not investment, financial, tax, or legal advice

Explanation

Magnifies both gains and losses. A 5% appreciation on a 4x-leveraged property creates a 20% return on equity.