Mortgage Paydown

• Rental income is used to pay down the mortgage balance, by paying the mortgage payment monthly. Once paid off, the value of property is owned in full by owners.
• More specifically, a large benefit of real estate is being able to use leverage. Banks will lend 75-80% of the purchase price, and even up to 96.5 - 100% if you live in the rental for a year. This makes it possible to not need a ton of money to put down to buy a rental. A portion of the rental income is used to pay the mortgage payment. Over time, that mortgage is paid off, leading to you owning 100% of the equity in the home. Therefore, you may only need to have enough for the down payment, but eventually own the entire property without any additional money invested.