Why do rich people always take out loans when they buy a building?



real-estate building loans finance the-rich

When rich people buy buildings, they don't just use their own cash, but they always use loans.

You can just buy it with your own money, so why do you have to pay the interest on the loan?


782 2017-06-29 Gentleman

A. 1

If you use a loan, you can buy a more expensive building
If you earn money here, you will have a lot of money left after paying off interest.


Gentleman 7 years ago 0

A. 2

They make more money because of the leverage
And the cost of interest on the bank can be treated as a tax, so it can be saved


Gentleman 7 years ago 0


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