After analyzing the expenses and returns on a paid-off NYC rental property, I find low net yields. Is leveraging with a mortgage detrimental? What factors explain real estate risks?
Hey RollingThunder, your point about low net yields is solid! I’m curious though, do you think the potential tax benefits of leveraging could outweigh the risks? How do others see balancing mortgages with these market uncertainties?
In my experience, leveraging a mortgage in NYC can be a double-edged sword. While it increases risk exposure, it also offers the chance to scale up investments that would otherwise be unattainable. A moderate use of debt might amplify returns, especially when tax advantages come into play and market appreciation trends are upward. However, careful analysis is essential because over-leveraging may lead to cash flow strain, particularly when unforeseen expenses or market downturns occur. I recommend a balanced approach after thorough risk assessment.