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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.

First of all, investing in real estate has the enormous benefit of financial leverage. Even if you borrow the money for your real estate investing from a bank you can often get into a deal with a 10% down payment which means your returns are instantly magnified 10 times. So let's assume you have $10,000 to invest and you get 10% return on your investment regardless of the vehicle. If you put it into the stock market you will buy $10,000 worth of shares and after 12 months your investment is worth $11,000. If you put that same money into real estate with a 90% loan you earn 10% on the full $100,000 investment and finish 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.

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.