Real Estate is different from other investments, in that you can derive profits from it in different ways.
Leverage
- Real estate is a physical asset where you use the banks money to increase your return on investment. With a 20% down payment, your investments are significantly increased.
Positive Cash Flow
- Real estate allows you to gain additional income that keeps pace with inflation.
Appreciation
- House prices keep pace or exceed the inflation rate. As house prices increase so does the value of real estate.
Principal Reduction
- Over time the principal is reduced with mortgage payments, increasing your equity in the property.
Diversify
- Physical assets help to diversify your portfolio.
Create Wealth
- Real estate values continues to increase over the long term, while the debt associated with the property decreases.
Accessible
- Anyone can buy real estate. It can be a shelter in more ways than one.
Improvable
- The value of real estate can increase significantly with the right renovations.
Deductable Depreciable and Deferrable
- There are many tax benefits that come with real estate investing.