The power of real estate investment is huge and should be part of any investment portfolio. Whatever type of real estate investment you decide to pursue, the benefits are clear -- principal paydown, cash flow, tax incentives, and property value appreciation.

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1. Principal paydown

Imagine asking your stock broker to buy $100,000 of stock but only paying $5,000 and then having someone else pay the rest of it. That's what real estate investment does. Buy a primary residence with 5% down payment, move out after a year or two and then have a renter pay your mortgage for the rest.

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2. Cash flow

Now imagine that above tenant not only paying your mortgage but actually giving you more than your mortgage. Our first condo in Denver had an all-in payment, including the HOA, was around $1,400. When we moved out, we furnished the space and now rent to traveling nurses for around $1,900/month.

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Accumulate enough cash-flowing properties, and you've got a nice supplemental income. 

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3. Tax incentives

There are numerous tax incentives to owning real estate rental properties. You can deduct the following:

• Depreciation

• Mortgage interest

• Any utilities or other costs to maintaining the property

• Property taxes

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4. Appreciation

Denver and Colorado Springs are great markets for long-term appreciation of property value. With a diversified economy in both cities and a great quality of life, the net migration into the state continues. With that comes rises in property values, including on any real estate investment properties you own.