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.

The answer naturally depends on your particular situation and goal. But let us probe into the differences. With the assumption that you chose the larger down payment, it is possible for you to get cashflow because you will give "lower" mortgage payments and at the 20 percent down payment, you will no longer need mortgage insurance. Do you prefer receiving monthly cashflow? Well then, a larger down payment makes you attain just 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!

You will have made double the amount of appreciation with the 10% down payment on $200K option, but you didn't have to spend one penny more! This effect will compound year after year and after awhile the difference will staggering.

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.

Not only are you getting more advantage by using more leverage (OPM) and getting less monthly cashflow, but you are also spared of minding other things. While debt payments and maintenance costs are tax deductions, cashflow is taxable. If you need the monthly cashflow, you can just modify your strategy to accomplish what you think works best for you. Perceptive investors agree that extra cash spent every month results to huge wealth building benefits in the future.

The choice is yours! Build your team of experts to help you make the right decision.

About the Author: Alexandria P. Anderson is a Minnesota Real Estate Agent that helps people to find and purchase Minnesota Townhomes and other properties in the Twin Cities of Minneapolis and St. Paul.