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.

Financial leverage is an enormous benefit to investing in real estate. Even if you need to take out a bank loan for your real estate investing, you will often find deals with 10% down payments, so your returns are already magnified ten times. Assume you have $10,000 to invest and can get a 10% return on your investment in any type of investment. In the stock market, $10,000 worth of shares will be worth $11,000 a year later. In real estate, your $10,000 investment, combined with a 90% loan, brings you 10% on the full $100,000 investment, so you finish with $110,000.

So in real estate your $10,000 investment has been doubled, where in the stock market it only produced an extra $1,000. Why is this? Because the lender's money has been working on your side as well. This is called leveraging and it is one of the most powerful advantage offered by real estate investing. And there are yet other reasons to become a real estate investor that you will also see.

Another good reason for investing in real estate comes from the tax benefits. One of the greatest tax breaks associated with real estate investing is the REQUIRED depreciation of the property by the IRS. This is representating a 'paper loss', but in most cases the value of the property (including land) is increasing. In essence you end up paying taxes on a reported figure of profit that is actually lower than you real earnings, which is 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.