Principal paydown occurs when we pay our monthy mortgage payment. As real estate owners, our tenants and residents pay us rent monthly. Part of that rent payment goes towards the principal amount of the loan-reducing our outstanding debt on the property.  We firmly believe that "good" debts are those  others are paying for you!  Principal paydown is agreat tool to build long term equity in a property.

Appreciation is increased value of an asset over time. In commercial real estate, this is primarily due to increased Net Operation Income (income after expenses are deducted). The best way to seure appreciation is to buy smart (don't overpay) and to buy an asset that will be worth more in the future than at the time of purchase.

Investors can "sheild" themselves from taxes by claiming allowable deductions, like the depreciation of real estate. This deduction can offset taxable income and reduce your tax payment. The benefits of a tax sheild are an incentive to hold assets longer, as you may have to recapture depreciation (pay back) when the asset is sold.  Please talk toyou CPA about the benefits of real estate sheilding taxes.