Real Estate
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1. Real property such as land, land improvements, and building held for business use in the production of income. It is contrasted with personal property. 2. Real property held for
investment purposes. Increased value in real estate has typically
exceeded the rate of inflation. But real estate as an inflation
hedge varies from locality to locality. Also, leverage exists
with real estate since a high percentage of the investment may
be made with debt funds. Down payments are often less than 25%.
However, a large capital investment is usually required. Real
estate provides capital appreciation or depreciation. Certain
real estate investments, such as residential and commercial property,
generate annual income. Directly managed real estate income property
provides tax deductions in the form of depreciation expense, interest
expense, and property taxes. |
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