Real Estate Investments: Direct 2 Your home – a.k.a. Principal residence As discussed in chapter 7, your home Is the major asset of most households Has great tax advantages Is a good hedge against inflation • A home produces an after-inflation return of about 2.5 percent a year (San Diego?) But it is a home first, an investment second In my humble opinion Examples of 3 Direct Real Estate Investments Vacation home Tax advantages depend on if the IRS views it as rental property Rental property Whole course unto itself! (More later) Undeveloped land Can ...