Leverage explained

This week we were back to normal after our live episode, and we eased ourselves back in by talking about leverage – a fundamental concept of property investing.

Leverage, or gearing, is another word for taking on debt – however, we explain why taking on mortgage debt to buy an asset is totally different from the “bad debt” you’d associate with credit cards or other types of borrowing.

We demonstrate with an example of how it works, talk about the risks of being over-leveraged, and discuss how to decide upon an appropriate level of leverage in order to get the benefits without the risks.

Resource of the week
Do you ever find that your life is just too straightforward and you long for a bit of excitement? Excitement maybe like going for a run but being chased by zombies in the process?

Well have we got a resource for you! Rob B shared Zombies, Run! – an app for iPhone and Android that keeps you motivated whilst you’re jogging or training for a run.

You want to be healthy enough to enjoy the rewards of your property portfolio after all, and if the motivation of dodging zombies is what it takes…

News this week
We shared two stories from The Independent: a finding that good weather leads to higher property prices, which may be a surprise to some, and another study suggesting that owning a property is still the #1 aspiration for young people – despite all the turmoil the market has been through.

This week’s mentions
Rob D mentioned that he’s written a free 8-part email course for beginners in property, which you can sign up for at propertygeek.net/course. This will help you wrap your head around all the property lingo you may have heard, but never properly understood.

Some fantastic news this week that we were also really excited to learn, Andrea Morgan the @rightmoveaddict has managed to get The Property Podcast onto the Rightmove blog. Check out her own website here.

Tell us what you thought of the show!
Do you have any questions about leverage that we didn’t answer?

What level of leverage do you aim for with your own portfolio?

Do you have a property topic you’d like us to cover? If you do then we’d love to hear from you over on Facebook, Twitter or Instagram.

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