Real estate investment is one of the most popular investment options available in the world today. Its lucrativeness makes it naturally attractive and after government backed investment options, it is one of the safest investment options available.
The years of experience that real estate investors like Ryan Dean Hoggan possess have let them know that the real estate market involves a lot more than a basic process of buying and selling landed properties. Rather, it has its own fair share of complexities which they have been able to navigate around over the years.
Gaining from his wealth of experience, Ryan Dean Hoggan shares some tips he wishes he knew when he was new to real estate investing.
Diversifying Investment Portfolio
Having multiple independent options in an investment portfolio is a general investment advice. Most starters tend to purchase a single investment type as a means of playing it safe and because it would require monitoring less from them.
Doing that, however, places all your investments at the risk of the market you’re operating in, whereas an investor with a diversified portfolio would not face this challenge. Diversifying your portfolio also increases your profit potentials across the different markets.
Buying Low, but buying smart
In real estate investment, the goal is profit. To maximize profit, it is important that property is purchased at low prices so as to increase the possible profit margin on the property. However, an investor should not purchase ridiculously low-priced properties that would still procure losses eventually.
For instance, if you purchase property in an area with a very high crime rate, the price would definitely be low. But the probability of finding a client for such a place is also low and this would lead to a loss.
Similarly, purchasing cheap property at foreclosure auctions is also risky because as a buyer, you would not be able to inspect the interior of the property before buying it.
A smart real estate investor would always plan his money and investments, or he would very easily run into loss. An important part of planning a budget is that it allows you to handle unexpected situations expertly.
An investor with a budget would not spend excess on rehabbing a house and when maintenance issues come, he would be able handle them.
To continue making profit, Ryan Dean Hoggan believes that real estate investors need to make informed decisions on the property they own or seek to purchase. Understanding the market, would guide in pricing the property, as well as predicting and planning for the future.
Furthermore, a trader who is better informed about new trends in the industry is better suited to utilize opportunities. For example, in recent years a trend is rising on using NFTs (non-fungible tokens) to transfer ownership in landed property between persons without needing a middleman. This new trend can only be tapped into if an investor is informed.
Handling Maintenance issues early
From experience, Ryan Hoggan recognizes that addressing maintenance issues early greatly reduces the cost from what it would be where it is not taken care of early.
To facilitate this, it is important that the communication lines between the clients and the owner of the property are working smoothly. This can be achieved by requesting periodic reports on the state of the property from the tenants, so that faults can be identified and resolved as early as possible.