Investing in today's market takes many forms. Real estate investing can be one of the most rewarding. Due to the lucrative nature of investing in real estate, it can the source of a very good income. Real estate investors find this investment vehicle to offer amazing benefits.

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.

While your $10,000 has earned only $1,000 in the stock market, it has been doubled in the above-mentioned real estate investment. How? Not only has your own money has been working for you, but your lender's money has, too. This power of leverage is one of the best reasons to consider real estate investing, but it is not the only reason we will give you to become a real estate investor.

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

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.

A final benefit to investing in real estate that is worth mention is that sale contracts are flexible. Unlike your investment in the stock market you are able to get very creative with the offers that you make. You are able to trade almost anything for a property instead of cash, this has the potential for increased returns and spectacular win-win situations.