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There are many ways people can invest in today's markets. One of the most rewarding ways is real estate investing. Investing in real estate can prove to be a very good source of income. If you become a real estate investor you will enjoy some amazing benefits which are favorable to this investment vehicle.

The first benefit of investing in real estate is enormous: financial leverage. Even if the money for your real estate investing is borrowed, with a 10% down payment, your returns are instantly magnified 10 fold. Regardless of the investment vehicle, with an investment of $10,000, the return on your investment will be 10%. For example, if you chose to invest in the stock market by purchasing $10,000 worth of shares, within the first year your investment is worth $11,000. Now, investing that amount in real estate, with a 90% loan at 10% earnings on the full $100,000 investment, results in $110,000.

The power of leverage is one of the biggest advantages which real estate investing offers. In the example above, $10,000 has been doubled in the real estate market, whereas it only increased by $1,000 in the stock market. This occured because the lender's money is working for you too. And this is only one of many reasons to become a real estate investor.

Another incredible reason to get most benefit from the tax amount is investing in real estate. This was one of the best tax breaks of real estate investing was the most REQUIRED depreciation by IRS on the property. This represents a "paper loss" when in most cases the property (including the land) is actually appreciating. So in this essence you pay taxes on a reported profit figure that is significantly lower than your actual earnings - good one.

Perhaps an even better tax benefit is the 1031 exchange as defined by section 1031 of the Internal Revenue Code. Essentially this allows investors to delay paying any capital gains taxes when a property is sold as long as the proceeds are reinvested in an appropriate property. The government is basically encouraging investors to stay in the market with this fantastic incentive.

One final benefit of investing in real estate worth mentioning here is the flexibility of sale contracts. Unlike the stock market you can get very creative with your offers. You can exchange virtually anything for a property instead of cash which can mean greater returns and some spectacular win-win arrangements.