Today's market offers investors a variety of investment means. One of the most rewarding opportunities is real estate investing, which can produce a very good income stream. If you choose to become a real estate investor, you will enjoy several benefits not associated with other types of investments.

First of all, investing in real estate has the enormous benefit of financial leverage. Even if you borrow the money for your real estate investing from a bank you can often get into a deal with a 10% down payment which means your returns are instantly magnified 10 times. So let's assume you have $10,000 to invest and you get 10% return on your investment regardless of the vehicle. If you put it into the stock market you will buy $10,000 worth of shares and after 12 months your investment is worth $11,000. If you put that same money into real estate with a 90% loan you earn 10% on the full $100,000 investment and finish with $110,000.

The power of leverage is one of the biggest advantages which real estate investing offers. In the example above, $10,000 has been doubled in the real estate market, whereas it only increased by $1,000 in the stock market. This occured because the lender's money is working for you too. And this is only one of many reasons to become a real estate investor.

Another incredible reason to begin investing in real estate is the tax benefits. One of the best tax breaks of real estate investing is the REQUIRED depreciation by the IRS on the property. This represents a "paper loss" when in most cases the property (including the land) is actually appreciating. So in essence you pay taxes on a reported profit figure that is significantly lower than your actual earnings - very nice.

The 1031 exchange, as defined by Section 1031 of the Internal Revenue Code, may be an even more beneficial tax benefit. This exchange allows investors to delay paying capital gains taxes on sold property if the proceeds are invested in another appropriate property. Through this excellent incentive, the government encourages investors to stay in the real estate market.

Another advantage of investing in real estate is the flexibility of sale contracts. You can get very creative with your sale contract offers. There is no limit on what you can exchange for a property, instead of just cash. This can mean greater returns and some fantastic win-win scenarios.