Why is Real Estate Such a Really Good Investment?

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There are no other investments available to the average investor that offers the combination of outstanding benefits that are available to real estate investors who invest in real estate.
In this article, let’s look at what makes real estate such a good investment and consider the four different ways to make money (returns) it offers real estate investors.
Cash Flow This is the gross spendable income (money before tax consequences) you have to spend at the end of the year after all the operating expenses and mortgage payments have been made.
Equity Income This is income derived from the principal reduction on the mortgage. Each time a mortgage payment is made, a portion is for the interest charged by the lender and the remainder reduces the balance on the loan. This income cannot be spent annually, but in a real estate investment this equity income can become a sizable amount you will receive when you sell the property. It’s like putting money in the bank.
Tax Shelter The advantage of owning an investment that produces a “paper loss” which the IRS may allow you to write off against other real estate income is a real advantage to making a real estate investment.
Appreciation The ability for real estate to become more valuable over time is why real estate has been dubbed “the only hedge against inflation”. Why does real estate appreciate? Because the supply of land is becoming limited and demand for investment real estate, whether single-family homes, apartment buildings, commercial or industrial, is on the rise.
Is real estate a good investment, absolutely. In fact, it’s because banks and life insurance companies recognize this fact that they invest in real estate (with your money) and are making 10 to 20 percent on it.