One of the great benefits of real estate as an investment is the capital gains tax advantage it has over other investment classes. With let’s say stocks and bonds the capital gains rate is 15%. If you sell your home and it’s your principal residence you can exclude the first $250,000 (500,000 for married couples) in profits from your tax bill. You had to own the house and lived in it for two out of the past five years. This capital gains tax advantage can be a good reason to invest in real estate, it can also be a motivation to sell and move on before the gains exceed the allowable deductions. I would always advise my clients to check with your tax advisor or accountant before making any tax related decisions about their homes.