A financing tool allows borrowers to access funds secured by real estate used for income generation. Similar to a credit card, it provides a predetermined borrowing limit from which funds can be drawn, repaid, and redrawn as needed. For instance, a landlord might utilize such financing to renovate a rental unit, paying back the borrowed amount over time with rental income.
This type of financing offers flexibility for property investors. It can provide access to capital for property improvements, debt consolidation, or other investment opportunities, potentially enhancing property value and rental returns. Historically, these instruments have played a significant role in real estate development and investment, providing a readily available source of funds for ongoing expenses and capital improvements.