This paper is distinguished from previous papers by its focus on income-producing properties, rather than owner-occupied single-family residential properties. The real estate investor's strategy, in terms of choosing an interest rate-discount points combination, is analyzed by using a discounted...

This paper examines the optimal leverage strategy for real estate investors who are investing in income-producing properties. Within a discounted cash flow context, the investment objective for the equity investor is to maximize the contribution to net present value of using mortgage financing....