Real Estate Investing Glossary
Equity
Equity is the part of a property's value that the owner holds free of debt.
Equity is the part of a property's value that the owner holds free of debt. It is the value of the property minus what is still owed on loans against it.
Why it matters to a Las Vegas investor
Equity grows as loans are paid down and can change as property values move. Investors watch it because it can later be used, for example in a refinance or when moving into another property.
Read more from Fernwood
Related terms
Questions about Equity
How does equity increase?
Paying down the loan raises it. A higher property value also raises it, and a lower value reduces it.
Is equity the same as cash?
No. It is an ownership stake that becomes cash only through a sale or a loan against the property.