7. Advantages of investing in real estate Like any investment, investing in real estate should only be done after weighing its advantages and disadvantages to determine how they apply to a particular opportunity. What are some possible advantages of investing in real estate? Check all that apply. Rental income from a vacation home lowers taxable income Low current income High transfer costs Large initial investment Tax-deductible interest expense on mortgage loan 1031 exchange (tax-free exchange) Business risk