Real Estate can be a great tax shelter to diversify your investments into. Many times I see clients who are either too heavy into stocks and bonds or they are too heavy into real estate and other types of investments. Individuals who I see that are too heavy into stocks I highly recommend they look into getting rental property mainly for the following reasons:
There are some standard abatement procedures that the IRS has set up to give relief to tax payers and small business owners when they forget or unable to file their returns on time.
Many companies provide 401k plans and many give matching contributions but not many people max their 401k when they can afford to and they can be missing out on potential long term tax savings. For a tax perspective allocating money to your 401k can immediately give you a 25-30% tax savings, where can you get an ROI like that in the market.
There are many tax savings methods available for small and medium size business. If allowed one of the best options is either incorporate or electing to be an S-corp. What an S-corp allows for small business owners to do is save on self-employment income taxes and if structured correctly can also allow for income allocation to individuals at a lower tax bracket.