Investing In Real Estate Still Has Benefits People have lots opinions nowadays about investing in real estate. And with all the news about the market in general, most are delaying purchasing real estate as an investment. Even though the market may be "slow" there are still many benefits to buying real estate in this market. 1) Cash Flow:  The actual cash that remains after paying all expenses. 2) Equity build-up:  The rent you receive will pay off your mortgage. 3) Depreciation: This is a tax write off against income. 4) Appreciation:  The increase in property value over time. Let's assume you have $100,000. in cash in the bank. If the bank is paying an interest rate of 2 percent, you will have earned $2,000. in one year. Now let's assume you buy a house for $200,000. and the property taxes are $6,000 per year. The market rent for this property is $1,500 per month.  You put $80,000. as a down payment and your mortgage is $120,000. At 5% interest, your mortgage payment would be $645. per month, based on a 30 year fixed rate. Therefore, your yearly rent is $18,000, deduct $6,000. for taxes, $7740. for mortgage payment, $1,500.  for property insurance; You are left with: $2,760. In this example, your cash flow would be $2,760 per year and you would get the added benefit of a depreciation tax write-off. Your accountant would use the best method, such as a straight-line over a number of years of the useful life of the property. From the initial one hundred thousand dollars you had, twenty thousand was available for closing costs and other miscellaneous items. As you are collecting rent, you are paying off the mortgage and building up equity. After a period of time, the property will appreciate in value and your equity in the investment will be greater. Now, let's assume you bought the property all-cash without a mortgage. After one year without that $7,740 in mortgage payments, your cash flow would have been $10,500., or a return of approximately 5 percent - better than the bank interest rate. So, real estate as an investment isn't too bad after all. But results are not guaranteed; you must locate the property and a tenant. Your success in making a good real estate investment decision will require knowledge of the market you wish to invest in. An accurate projection of what you can receive in rents and the expenses involved will take effort on your part. Since real estate prices have already fallen and have "bottomed-out" in most areas, this may be the best market to invest in. Mortgage interest rate are low; the rental market is very good in most areas, and the interest rate banks are paying on money market deposits are low.  For all the reasons above, this is an investor's market. Contributed by M.S. Jazzetti   Website: http://www.betterlifestyles.com