Real estate investors make money through rental income, any profits generated by property-dependent business activity, and appreciation.

As you pay down a property mortgage, you build equity—an asset that’s part of your net worth. And as you build equity, you have the leverage to buy more properties and increase cash flow and wealth even more.

Leverage is the use of various financial instruments or borrowed capital (e.g., debt) to increase an investment’s potential return.

Becomes a regular source of income for the investor.

Real estate investors can take advantage of numerous tax breaks and deductions that can save money at tax time. In general, you can deduct the reasonable costs of owning, operating, and managing a property.