> don't borrow money trying to make money. that's like having a margin account with etrade! You don't pay interest on a loan and use the money from that loan to buy stocks do you?
The difference is that interest rates on margin accounts are far higher than they are on real-estate. A margin loan may be 8% or more. So you have to invest in something that grows faster than that to make any money. However real estate loans are 3-4%/year, and in addition they generate rental revenue which is also roughly 3-5%/year.
Taking out a loan on real-estate makes far more sense than taking out a margin loan.
The difference is that interest rates on margin accounts are far higher than they are on real-estate. A margin loan may be 8% or more. So you have to invest in something that grows faster than that to make any money. However real estate loans are 3-4%/year, and in addition they generate rental revenue which is also roughly 3-5%/year.
Taking out a loan on real-estate makes far more sense than taking out a margin loan.