In real estate investing, what is considered a major component of the overall return?

In real estate investing, tax benefits are indeed a significant component of the overall return on investment. These benefits can come from various sources, such as depreciation deductions, mortgage interest deductions, and other tax incentives that can enhance the cash flow generated by the property. By reducing the taxable income, these tax advantages can lead to increased net returns for the investor.

While future value projections, government policies, and financing options can influence the performance and profitability of a real estate investment, they do not directly impact the immediate cash flow in the same way that tax benefits do. Future value projections are more about estimating the potential appreciation of the property over time, which is uncertain and does not contribute to current returns. Government policies can affect market conditions or the viability of certain investments, but they do not provide direct financial benefits. Financing options are crucial for enabling the purchase and affecting the cost of financing but do not provide tangible returns like tax benefits do. Thus, tax benefits stand out as a direct component contributing significantly to the overall return in real estate investing.