Real Estate has had a gigantic boom in the past couple of years, and many experts agree that there is still room for it to grow. While the best time to get into real estate investing was about three years ago, the second-best time is right now.
If you’re new to real estate, it’s important to start right. This is why we talked to Ryan Hoggan and asked him for his best tips for those looking to dive into the world of real estate.
Ryan Hoggan is a venture capitalist, veteran entrepreneur, and professional real estate investor with almost two decades of experience under his belt. If there was anyone you want to guide you into the shoes of a real estate investor, it is Hoggan.
Passive vs. Active
The first thing Ryan suggests is deciding if you want to be a passive or active investor (or both). An active investor will purchase and manage their own rental property, for example.
While a passive investor will purchase the property but also hire someone else to manage it and deal with the day-to-day happenings of the property. There are pros and cons to both strategies; an active investor will see higher profits but they will also have to invest much more time into the rental property than a passive investor.
Purchase a Home
Ryan Hoggan points out that if you do not currently own a primary residence, that it might be the time to purchase one. The past couple of years proves that if you purchase your home now, there is a good chance that it will greatly increase in value by the time you want to sell it.
The other advantage of doing this is that you do not have to pay rent, which is practically burning money since once you move out of a rental property, you’ll have nothing at all to show for the money you spent on it.
Purchase a Rental Property
A rental property is a great investment and the perfect way to dip your toes into the real estate game. Renting out a single-family residence is a fantastic way to start earning a passive income for the long term.
More people than ever are renting their homes instead of purchasing them outright, meaning you will always be able to fill your property. As mentioned above, you could manage this property yourself or hire a company or individual to manage it for you.
READ: 10 BEST CITIES TO INVEST IN RENTAL PROPERTIES IN 2022
Leverage pretty much means taking out a loan or someone else’s investment in order to pay for a property. There are a few advantages of doing this.
The first is that you will need less money to start, normally a 25% down payment or something similar. Now, when that property increases in value, if you used leverage instead of purchasing in cash, your return on investment will be exponentially higher.
Leverage works out especially well in today’s housing and real estate market.
REITs & ETFs
Trusts are a great way to get into real estate investing without actually purchasing and selling your own properties. Real estate investment trusts (REIT) are companies that buy and manage different kinds of real estate property.
Purchasing shares in REITs is quite similar to how you’d purchase any other stock online. ETFs are another similar option, allowing you to invest partially in many successful real estate securities at once.
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