Five Key Factors make Housing Attractive to Small Investors

Investing in residential real estate is one of the primary means of wealth accumulation in America today. For most Americans, investing in their own home is the best investment they will ever make. Extending that investment to other properties can be an excellent means of building net worth.

There are five key characteristics that make real estate investing particularly attractive to the small investor.

Income - The property produces income in the form of rent and that income can be used to pay for the investment itself.
Depreciation(and other tax benefits ) - Many investors aim for a “break even” cash flow, but still get solid cash tax benefits from the tax shelter generated from depreciation.
Equity Build Up - Equity in the property grows from the gradual pay of the loan balance through amortization.
Appreciation - This increase in value can come from two sources: from the economy (overall increase in value of real property) and from the improvements made by the owner (paint, carpet, adding a deck, etc).
Leverage- It only take a small amount of cash to control a relatively large investment in residential real estate.

These primary benefits of residential real estate can reward the investor year after year and allows the individual to begin building wealth in his or her spare time.