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Is there any instance where less leverage will get you a better return on a rental property?
Leverage means you can make more investments with the same amount of money.  In the case of rental properties, it means you can own more properties and generate more rents.  You exchange a higher cost of doing business (higher interest fees) and a higher risk of total failure, for a larger number of rents and thus higher potential earnings. As with any investment advice, whenever someone tells you "Do X and you are guaranteed to make more money", unless you are a printer of money that is not entirely true. In this case, taking more leverage exposes you to more risk, while giving you more potential gain.  That risk is not only on the selling front; in fact, for most small property owners, the risk is primarily that you will have periods of time of higher expense or lower income.  These can come in several ways: If you weather these and similar problems, then you will stand to make more money using higher leverage, assuming you make more money from each property than your additional interest costs.  As long as you're making any money on your properties this is likely (as interest rates are very low right now), but making any money at all (above and beyond the sale value) may be challenging early on.   These sorts of risks are magnified for your first few years, until you've built up a significant reserve to keep your business afloat in downturns.  And of course, any money in a reserve is money you're not leveraging for new property acquisition - the very same trade-off.  And while you may be able to sell one or more properties if you did end up in a temporarily bad situation, you also may run into 2008 again and be unable to do so.