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Chapter 10. Real Estate and Other Invest... > Real Estate and Related Investments

Real Estate and Related Investments

Real estate captures and holds our attention for any number of reasons. It's “cool” to own real estate, and it's tangible property that we can see and touch. And unlike equity in a stock over which you have next to no control, you have almost absolute control over the real estate you own. There is also a limited amount of real estate and an even more limited choice of prime real estate. On top of all this, you are provided with some nice tax benefits, and real estate can provide income if you're buying and renting real estate properties.

But perhaps one of the best advantages of real estate is that it is a leveraged investment. Let me explain. With a stock or a bond, you generally put in $10,000 to get $10,000 of value and 100 percent of the growth of the investment. With real estate, on the other hand, you may put in as little as $500 to control 100 percent of the growth of the investment. In other words, real estate allows you to leverage your investment for the cost of your loan to buy the property.


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