Real Estate investment is considered by many as the easiest form of investment. One of the reasons is that there is a good exchange between the tenant and landlord. As long as the place of stay is good, and the landlord receives his or her due on time, life runs smoothly. But real estate investment is a bit complex than this. If you make up your mind to invest in real estate, your goal is to invest your money and grow it so that you earn more. You have generated enough profit that will cover up any risks and other costs of owning a real estate property. The task is to introduce you to the basics of real estate to help you gain a rough idea of how investors make income from their real estate enterprises. While some people who get into real estate do it because they are wanting to help others by helping them realize their dream of being a home owner. No matter why you want to get into the real estate investing, you need to know some of the major benefits that come with dealing with real estate. 1. You have the ability to use leverage in order to minimize your cash outlay When you have the ability to leverage, you will have the ability to “own” all of a specific asset even if you pay cash for about twenty percent of it. This will make the investment of rental properties more unique as compared to any other investment type. For example, say you have a rental property that costs one hundred dollars. But you cannot pay the twenty dollars it will take to acquire it. Therefore, you are going to end up paying the entire amount of one hundred dollars. The leverage option is there in order to help minimize the out of pocket expense to you. This makes rental properties a good entry level type of investment for people who have little discretionary income to spare. The power of leverage is going to combine with your free equity that you have accumulated in order to generate an excellent cash on cash ROI as soon as you decide to sell. It is because of leverage that so many people who have become wealthy did it through real estate investment. 2. You’ll have the ability to earn free equity: This is the ultimate benefit of real estate investing. The tenants of the properties that you own are going to pay the property mortgage every month as well as any other expenses that the property may have through rent. Therefore, there is going to be a decline in your mortgage balance while there is an increase on the properties equity as time goes on. Once you decide to sell the property, you will be cashing out on the equity that has built up on the property. As an example, it is like having an investment account on the house that has been paid into every month while not getting anything in return. 3. You’ll have the ability to be able to reduce your tax liability: You’ll be able to have multiple rental property deductions on your taxes. This even happens if the financed expenses did not come out of your pocket. Just as long as you own the property in what is known as a one-person real estate LLC, then all the deductions will be able to be included on your regular tax return. This will end up increasing your tax refund. Basically, you are able to spend what you are making on the property and getting taxed for it later. Simply put, when you have reduced taxes, you’ll have more money that is strictly yours. 4. You’ll eventually have the ability to generate a monthly cash flow: The ultimate goal of getting into real estate investing is to be able to have an income when you decide to sell the properties in about ten or more years. But, the best way to make sure that this will happen is to make sure that you have a cash flow that goes into a reserve account every month. This will come in handy when something unexpected happens such as your tenant decides to move out without warning, or a natural disaster happens and the house needs to be fixed. When you are first starting out, just like with anything, your cash flow is going to be tight because of the fact that you are just starting out. But, do not let this discourage you, your cash flow will increase each year. This will happen because you can raise rent as you subsequently increase the income of the rental property while you are paying extra towards the mortgage principal every month as well as managing the property costs. A few years down the road, you will most likely be able to see a small profit of perhaps a hundred bucks a month. Depending on what is going on with the property that you have, you can either keep all the money for yourself, or you can put it back into your rental property so that you can pay your mortgage down faster. 5. The gratification of providing a home for someone: This isn’t one of the instant gratification type benefits when it comes to real estate investing. This is more something that you are going to feel good about none the less. You’ll be giving back to someone in a way that is non-monetary because you’ll be providing a home to someone who may not otherwise be able to live in a home. On top of that, as you take care of your tenants, they’ll take care of you by making sure that they do everything they need to do in order to make sure that you get rent on time. Tenants should be viewed as customers, not as a way to just make money. Just like you are, they are people with their own problems that they have to worry about and by you giving them a place to live, then you’re helping take away one of their worries.