Articles provided by RE-Sterling.com

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.

First, investing in real estate has an enormous benefit of leveraging financially. Even borrowing money for real estate investing from a bank you may often get a deal with a down payment of 10%, this means your returns may be instantly increased tenfold. Assuming you have $10,000 for investing and you get a 10% return on that investment regardless of the investment vehicle. Putting this in the stock market will buy you $10,000 in shares and 12 months later your investment is worth $11,000. Putting the same money in real estate with a 90% loan you end up earning 10% on the entire $100,000 investment and end up with $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 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.

There is, perhaps, an even greater tax beneft in the 1031 exchange as defined in section 1031 of Internal Revenue Code. What this essentially allows is for an investor to delay the payment of capital gains taxes after the sale of a property as long as the gains are reinvested in another appropriate property. Here the government basically encourages an investor to stay in the market because of this great 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.