4- Ways Money is Made through Real Estate

1.    Cash flow- this is the amount of money from your rent that is left over after paying all your expenses for repairs, taxes, mortgage etc.

2.    Appreciation- This is the amount your property increases in value every year. During poor market conditions it can be as little as %3 and up to %15 in booming markets.

3.    Amortization- This is when you have a loan on the property. Part of your monthly loan payment, which is provided by the tenant, goes towards paying down your principal loan balance.

4.    Tax Shelter- In every country one must pay taxes on their profits from real estate. As the United States is the friendliest country in the world towards real estate investors, there are many deductions that can be taken from your profits to reduce your taxable amount. For example, taking a “trip” to visit your property. Due to multiple tax advantages, it is common to not pay any taxes for the 1st couple of years.