Much has been said about real estate and its wonders. But do you really know the real score on how it creates wonders for your money? After all, different people hold various opinions on how much good do leverage and OPM (other people’s money) have.

Many who engage in this business have distinct goals, so you must always keep in mind that your team of experts needs a well-trained mortgage professional. For one, the examples below may or may not address your ultimate concern. People’s aim may vary from receiving monthly cash flows as additional incomes to preferring investment appreciation in some others.

In achieving your financial goals, we can look at some options you can consider. The best thing here is that you are in control when it comes to real estate. To start with, let’s say you have $20,000 as a principal. If you are eyeing a $100,000 worth of property, you can deposit a 10 percent down payment. Alternatively, you can put in a 20 percent down payment for a $200,000 property. The rest is for you to decide.

There is no right or wrong answer; again, it depends on your goals, but let’s look at the differences. Whenever you make a large down payment it is more likely that you will be able to get cashflow because your mortgage payments will be lower and at the 20% mark you do not need mortgage insurance. So if cashflow is what you desire, larger down payments help you achieve that.

On one hand, let us say that the appreciation is set at 6 percent for both properties. (Appreciation rate varies depending on the location, type of property, etcbut for this specific article, we will assume it at 6 percent). In just a matter of one year, your $100,000 property is now worth $106,000. However, the $200,000 property becomes $212,000!

The amount of appreciation for both properties ($100,000 and $200,000) obviously doubles itself year after year. All these and more, but you would not be spending any thereby saving yourself some serious bucks!

In no time at all, savvy investors like you will have enough to get you some equity and you can eventually purchase another property. The MORE properties you have working for you, the better the effects of appreciation will be. What are you waiting for? There will be some limitations in paying a lower percentage down payment though such as additional maintenance costs. But those are minor issues if you compare it to the long-term benefits it promises.

In addition, cashflow is taxable but debt payments and maintenance costs are tax deductions so again you’re getting an advantage by using more leverage (more OPM) and getting less monthly cashflow. Some people need the monthly cashflow, and if so, one can shift his strategy to accomplish just that. Many others will find that giving up the extra cash every month means huge long-term wealth building advantages.

With these in mind, its not surprising that you chose the better one. Start pooling your team of experts now and make the right choice!