Leverage is borrowing to boost potential profits. In real estate, use a mortgage. If property values rise, it's profit. But if they decline, it's a loss.
Appreciation
Real estate values increase over time. Renting out property can help pay off the mortgage while property value appreciates.
Cash Flow
Cash flow is key in real estate investing, covering expenses with rental income. Positive income, less expenses = Positive cash flow. Vice versa for negative cash flow.
Tax Benefits
The biggest tax benefits of real estate investing are the ability to deductdepreciation and to deduct mortgage interest.