Unlike other assets like stock or a mutual fund, real estate is a tangible asset that you can touch. It is also a finite resource. So unless you can afford to construct your own private island there is not an endless supply to be divvied up.

The government wants you to invest in real estate. They give all kinds of incentives and tax breaks. Some examples? A tax-free gain on the sale of a primary residence if it was owned and occupied for two of the past five years. You have possible deductions from travel expenses, repairs, depreciation and even the interest on the mortgage. The list goes on, thanks, uncle Sam.

Have you heard the phrase ‘don’t put all your eggs in one basket?’ This is a very handy tid bit of advice when it comes to investing. Diversification is an important characteristic of any investment portfolio. Real Estate is ideal because it has a very low correlation with the other major asset classes. This means it can lower the volatility or risk of your portfolio. Less risk, big gains

A rental property has built in inflation hedging. Real estate reacts proportionally to inflation. When economies expand, and prices rise, the demand for housing and real estate drives up rental rates. This translates to higher capital values of the property. So to protect against inflation an investor can simply pass along the inflation pressure to their tenants.

Loans are a valuable tool for investing in real estate. There are a number of institutions that allow for you to leverage your money as opposed to paying the full cash price for a property. Using a loan gives an investor the ability to acquire a property for a lower out of pocket expense. This method may allow for a savvy investor to pick up several properties at a time as opposed to cashing all in on only one

The primary reason investors start buying real estate, other than HGTV, is for cash flow. Owning a rental and have the tenant pay for the mortgage, while you collect a small stipend, along with the property continuing to appreciate makes for an ideal perfect storm to grow wealthy. Some opt to go for the quick gains through flips, which can also be very lucrative as long as the conditions are ideal. In essence making a profit off of an asset that pays for itself is a sound strategy.