Real Estate is said to be the source of more fortunes in the United States than any other. Historically quality real estate has been a dependable source of income, a great inflationary hedge and a readily marketable commodity.

The income produced by an investment property is primarily from two sources. Income from the use of the property and appreciation in value over time.

Because of the stability of the asset (it does not move or disappear) and the continuing need for the product, real estate is readily financible and marketable. Furthermore since the benefits of ownership are relatively constant, real estate tends to appreciate at least to the extent of inflation.

We particularly like single family real estate because demand for the product is the most stable. The number of potential users is greatest and given that it fulfills one of the basic needs (shelter), demand is stronger than a product which depends on discretionary income.

While real estate is no longer the tax shelter that it once was, it is still one of the best ways to buil wealth effectively on a tax deferred basis. Improvements on real property may be depreciated on a straight line basis over twenty eight years even though typically the property, if properly maintained, is appreciating in value. Additionally maintenance costs are tax deductible. Utilizing 1031 exchanges it is possible to build a considerable real estate portfolio over a period of time. Proper estate planning can tax defer capital gains on real estate across generations.