If you’ve been thinking of jumping in but haven’t quite made the decision, I have 4 factors for you to consider as to the advantages of real estate investing.

1)    Tax advantages – Several deductions are available for investors in rental properties that make opportunities even more attractive.

• Depreciation on the property value.  This is not just on the mortgage value, but on the value of the property itself.
•  Interest on the mortgage loan – and also on credit cards used for purchases of goods and services for the property.
• c.    Repair and rehab costs.
• Travel – Both local travel for repairs and management, as well as long-distance travel for property management purposes – but do keep proper records for the IRS.

2)    Appreciation of your equity as the loan is amortized – Or in more basic terms, as the loan is paid down, your equity in the property grows, adding a valuable asset to your portfolio.

3)    Tenants pay the mortgage and expenses through rent collections.

4)    Cash flow into your pocket – One of the best reasons to invest is the cash into your pocket from rentals over and above your expenses.  For a fix-and-flip, the cash flow is called “capital gains,” the profit on a sale over and above the costs invested.

Although these factors tend to be larger for rental properties, most apply just as well to a fix-and-flip.  Your costs are tax deductions, as are the interest on the mortgage financing and even on credit cards used for expenses.  The final result – cash over and above all your payments filling your pockets.

Investments in traditional stocks, bonds, funds, and so forth may add up to the same total dollar amount put into a property, but they are without the deductions for depreciation, interest, and part of the investment itself (repairs and additions.)

Of course the drawback that concerns many investors is that real estate takes longer to sell, and sometimes buyers are harder to scrounge. The answer is to mitigate this risk with wise real estate investment choices that will be easier to move if there is a difficult market direction. With fix-and-flip projects, the turnaround is quick enough that there is not much exposure to the slower market moves of real estate. And, if you are holding a property as a rental, market swings do not matter much as I always recommend buying only rentals that truly cash flow. Any future appreciation that you may receive when you do decide to sell is just gravy.

Take a look at my post from last month, “Economic Recovery and the Housing Market: Invest NOW!” , then click the tab on this website “Resources” to find more information on real estate investing.  As explained in my earlier post, market forces today are creating unique opportunities that you don’t want to miss. Keep moving on this – profits are waiting.

How could real estate investing help build your portfolio?

If you are new to real estate investing and exploring this process, I suggest starting with my free ebook guide to finding undervalued properties.