As we discussed in a previous blog I firmly believe that real estate is the best way for most people to achieve their financial freedom over time. While I believe that everybody should have some real estate in their portfolio not everybody is cut out for physically owning property.
The first decision you need to make is, “how am I going to get involved.” You can be the ‘real estate expert’ and actual own and manage your properties with your own funds or those of a joint venture partner.
Alternatively, if you have the financial resources to do so you can be the ‘money partner’. This is where you team up with a real estate expert, supply the funds and let them actively manage the property. Since this involves a small group you would still have a good deal of control but not be involved day to day.
A third way is to invest in public real estate companies like REIT’s (Real Estate Investment Trusts). These are listed on public stock exchanges and can be purchased like any other stock or mutual fund. These are large companies that buy and hold different types of real estate. These are really hands off as a professional manager overlooks the entire portfolio.
The level of time spent, money invested, responsibility required and knowledge you will need differs greatly. Somewhere in there is a mix that works best for you. That is the great thing about real estate. There really is something for everybody.
You can progress as quickly or as slowly as you want. You can buy large or small properties. You can buy buildings that are beat up and fix them up or you can buy properties that are in great shape with existing customers that are already cash flowing.
You can buy one suite or multiple suites. You can do all kinds of different strategies – fix and flip, long term rental, condo conversion, land parceling, land development, new construction and changing the use of an existing property. You can deal with residential or commercial properties.
There really is something for everybody. Give it some thought, get educated and then go for it.
Read more about this in Comparing Real Estate Strategies.