Real estate investing offers several advantages over other types of investments. First, you can use leverage (other people's money) to pay for the investment. In most cases, financing is available for up to 80% of the investment. Provided that your return on the investment (yield) is greater than the cost of the financing, then you are making money on the borrowed money (positive leverage). Additionally, over time, the rental income that is used to pay your mortgage, reduces the mortgage balance, creating a buildup of equity in the property.
Further, you have several tax advantages through rental property investing. You can presently reduce your tax liability with depreciation, and deductions for mortgage interest and property tax expense as well as capital expenditures to the property
Lastly, real estate offers appreciation. As property values go up, so does the value of your investment. All these elements make real estate investing a favored choice of savvy investors and one of the all-time greatest wealth generators.