Why is over-leveraging considered a threat to an investor's endurance?
Answer: Over-leveraging means borrowing too much against a property. In a downturn, if rental income drops or financing costs rise, an over-leveraged investor may be forced to sell at a loss because they cannot cover the debt payments. True endurance requires a conservative debt-to-equity ratio that allows the owner to wait for the market to recover.
Calculate safe leverage: Mastering Real Estate Investment: Key Elements for Success