Many investors have been flocking to real estate investing for the last few years. There has been significant growth in the market, and while it has slowed down, it doesn’t appear to be stopping.
Real estate will likely be one of the most profitable markets for the next decade. So, while a couple of years ago would’ve been the best time to start up, now is the 2nd best time.
But how do you start on the right foot? Well, you take advice from experts—people like Ryan Hoggan, who have been successfully investing in real estate for years.
We decided to interview Ryan Hoggan and asked him to share some of his essential tips for new real estate investors, and here’s what he had to say.
Ryan Hoggan: We have to remember that Covid is still impacting the real estate markets, so it’s hard to give an exact price on that because it all depends on location. I do have some advice for this question, however.
Many new investors make the mistake of only seeing the upfront costs of real estate. You know how much purchasing the property costs. They don’t think about maintenance, taxes, and other yearly expenses.
So my advice to new investors is to keep that in mind when buying new real estate.
Ryan Hoggan: It’s personal preference, really, and it depends on how involved they’d like to be. They could purchase a residential property and be the landlord. This would involve maintenance and all of the other bells and whistles.
Usually, it is more involved. They could do the same with a commercial property. On the other hand, they could work with a management agency that will take care of all of that, cutting into their profits.
However, that’s worth it for those with less time to deal with all of that. If someone doesn’t want to rent, they could go the house flipping route. This route also sees quicker profits but can be riskier for new investors.
How much does location play into a new real estate investor’s experience and strategy?
Ryan Hoggan: The real estate market is always local. It’s probably the only market that this is true for. So, location plays a huge role, and new investors need to keep that in mind.
Judge prices based on local real estate, and keep the surroundings in mind. For example, if you’re purchasing a property to rent out as a vacation home, you need to look at the neighbourhood it’s in and what commodities are nearby.
How can new investors buy a property? Do they need to start a small business, or can they just buy it?
Ryan Hoggan: I have a couple of pieces of advice to get started as a brand new real estate investor. The first piece is to look into leverage. Cold hard cash is nice, but leverage can drastically increase your profit margins.
The second piece of advice is to consider starting an LLC highly. LLCs are a great way to protect your personal property and finances. So if you’re serious about real estate investing, an LLC is a must.
Ryan Hoggan: Not at all. The opposite. When scoping out a new property, it’s beneficial to have a team of people you can call and consult.
A team of handymen and local realtors you can trust, for example. Building a working relationship with these people is crucial to success.