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A plethora of investment options are available to people looking for places to invest their savings. One such option is beginning real estate investing. It is a highly rewarding investment option and if you do decide to make money in real estate investing you will enjoy excellent returns on your investment, much more than most other investment options.

Real estate investment has the enormous potential to give huge returns. You can borrow the money from a bank to finance your real estate investment. Most of the banks are willing to finance 90% of the cost, so you can get into a deal with a 10% down payment. This gives you a 10 times return on your investment. Let's take the example - if you have $10,000 to invest and assume you get 10% return regardless of the investment vehicle you use. If you invest in stock market to buy shares worth $10,000 then at the end of 12 months, your investment is worth $11,000. Instead, if you invest the same money into real estate with 90% bank loan, you earn 10% on the total $100,000 investment and you will endup with $110,000.

Compared to stock investing, real estate investing gives ten times more returns. Mind boggling, isn't it? Before you start to wonder, "How on earth is that possible?", let's answer it for you. When you take a loan for buying a property, it works towards maximizing your returns by the concept of "leverage". Though there are several other reasons for real estate investing, leverage does make real estate investing lucrative to potential investors.

Another reason for getting started in real estate investing is the tax benefits. Required depreciation allowed by the IRS on the property brings the actual tax liability down every year but on the contrary the actual value of the property and the land is appreciating in the market. So you pay less tax on the reported profit figure which is lower than your actual earnings.

A great tax benefit is the 1031 exchange. This exchange is defined by the IRS Code. This exchange permits investors to delay the payment of capital gains taxes if the gains are later reinvested in another property that meets the codes guidelines. The government wants people to stay in the real estate market and reinforces this with this tax benefit.

There is a unique advantage of real estate investing in the fact that, unlike in stock market, you do not need to have standard offers and contracts. You can virtually bargain anything and everything for your property, resulting in some stupendous gains for everyone involved.