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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.

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.

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.

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

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

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.


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