Leverage effect

The leverage effect has to do with your equity and how profitably you invest it. In other words, your return on equity.

IfLeverage Effekt_EN your annual rental income is higher than the costs you pay for your loan — interest and repayment — your return on equity increases. So from a business perspective, it can sometimes pay to borrow more money than you actually need to.

How to calculate it all? Take a look at "Return on equity".