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The magic of property leverage 19 Feb 2018

If you’re using rental properties for your nest egg, consider adding value by making alterations to your property worth more than their cost. For example, you buy a house for $500,000. You subdivide it into two flats for $100,000 and, because of the increased rent, the property becomes worth $670,000. This is called leverage. It increases your equity. You should keep money aside, when you buy, and leverage at the beginning. Pick locations which lend themselves to subdivision into flats or rooms such as near a hospital or university.

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