Take the risk (2)

the benefits
Aside from being your own boss, having the freedom to travel while
earning profits, increasing your net worth, and having a place of your
own to call home, investing in real estate holds even more benefits.

Cash flow
Cash flow is the difference between your income and your expenses on a
piece of property. You can have a positive or negative cash flow.
Obviously, you'll feel a lot better if the cash flow is positive.

My advice on cash flow is this: Never use all of your positive cash
flow for rapid debt reduction. You will be walking a thin line. By
keeping a strong positive cash flow, you will have more options and
space to maneuver.

Appreciation
Appreciation is the increase in value of a property. There are two
kinds of appreciation. The first is from economic conditions beyond
your control, such as inflation. But you won't gain much from this
type of appreciation since the gain is offset by the higher cost of
living.

The second kind is market appreciation, which you can control. When
you improve a property (through renovations), you force its value
higher. You can purchase a piece of property in need of repairs and
bring it back up to neighborhood standards or slightly higher; this
will give you a property that is much higher in value.

Leverage
Leverage is the ability to borrow a percentage of the value of a piece
of property. Real estate, in comparison to other investments, offers a
very high degree of leverage. In some cases, a couple buying a
single-family home can obtain 95% financing. This allows individuals
to purchase real estate with little, if any, of their own money. What
other investments offer such a high degree of leverage?

Amortization
With leverage, or the use of other people's money, comes a repayment
schedule. Your outstanding balance is reduced with every payment you
make. Part of each payment goes to interest (applied first) and the
rest goes to pay off the principal. The principal reduction is called
amortization -- reducing debt. Hence, amortization can make you
wealthy, slowly and steadily.

Tax advantages
Owning real estate with the goal of making a profit allows you to
deduct interest payments and other expenses come tax time. But don't
be fooled into buying real estate for the tax advantages; rather,
purchase it because it makes economic sense to do so.

Benefits of buying
Owning a real-estate business is a great way to achieve your financial
freedom. What could be more worthwhile than taking up real estate as
either a full-time business or even a hobby? The benefits are
definitely there.