If a property is valued at $500,000 with an outstanding debt of $375,000, what is the investor's equity?

To determine an investor's equity in a property, you subtract the outstanding debt from the property's total value. In this case, the property is valued at $500,000 and the outstanding debt is $375,000.

Calculating the equity involves the following formula:

Equity = Property Value - Outstanding Debt

Substituting the given values:

Equity = $500,000 - $375,000 = $125,000

This calculation shows that the investor has $125,000 in equity, which represents the portion of the property that the investor truly owns without any encumbrances from debt. Understanding how to calculate equity is crucial for investors as it helps assess the financial health of an investment property and aids in making informed decisions regarding potential borrowing or selling of the asset.