Imagine you’re an investor interested in purchasing a rental property. You have two options: you can buy the property outright with your own funds or you can use leverage by taking out a mortgage to finance a portion of the property’s purchase price. Example 1: Buying Property Without Leverage Let’s say you decide to buy a property for $300,000 using your own funds. Over the years, the property appreciates in value by 3% annually, and you’re able to charge $1,500 in monthly rent. In this scenario, your investment is fully unleveraged, meaning you haven’t borrowed any money to make the…