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Four Benefits to Investing in Income Property

Investing in real estate is an excellent way to diversify any investment portfolio. There are four major benefits when investing in income property. And over time, each of these benefits become more and more valuable. We’ll cover how each aspect can reap great rewards for your real estate investment.
Capital Appreciation
Capital appreciation is the increase in value from the price of the real estate increasing. In other words, as the property rises in value your investment value also rises. Add to that increase the effect of leverage and real estate can offer large returns. For example, suppose you purchase an apartment building for $500,000 and take out a loan for $400,000. Now, assume that in five years the value of the apartment increased by $100,000 to $600,000. The capital appreciation on your investment is $100,000. The return is $100,000, which equates to a 20% increase in value. However, the …