Who doesn’t like a snappy acronym? We sure do and today we’ve got one to help you remember why real estate investing, especially income property, is such a great deal.

Income
With the inward cash flow from an income property you literally outsource your mortgage payment to the tenant. This is an amazing benefit when you think about it. Try buying stocks, bonds, gold and getting someone else to willingly pay for it. Not gonna happen. On this basis alone, real estate leaps to the front of the investment asset class but we’re not done.

Depreciation
As an investor, you can actually depreciate the value of your investment property over a period of several years. What that means is you can take the purchase price, divide it out by 27.5 years, and use that annual amount to offset income. In a word, amazing benefit.

Equity
Equity is the major aspect most people consider when buying income property or traditional real estate. With income property, you’re gaining equity while someone else (tenant) makes the payment. At the end of the mortgage, if you allow it to go that far, you own the property and one hundred percent equity.

Appreciation
When your income property goes up in value, that’s a good thing, right? Absolutely! Since there is a limited supply of this high-in-demand asset, the natural tendency of its value is to always trend higher and if you happen to own real estate in a geographic area that suddenly decides to to take off – watch out. You could gain wealth in a real hurry.

Leverage
Last but certainly not least, we come to the concept of leverage. Leverage is when you put up a fraction of the purchase price of a property and a lender puts up the rest. The ultimate effect is that, as an investor, you can amplify your investments by controlling a higher dollar amount of property than you actually have cash for. Gains and losses are magnified in real estate because of leverage, a risky proposition if you don’t know how to prick properties correctly. Luckily, it’s not that hard to do.

The AIPIS Team

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