Jun 15, 2010

Renovations: Do It Yourself…Just be Sure You’re Able

You’ve become an expert investor, but what about renovator? Lawyer? Real Estate Agent? When investing in real estate, you will need to decide when to renovate yourself and when to bring in the experts.

While the purchase and accompanying negotiations will affect profits from your real estate investment, the most influential factor is the steps you take after the purchase. You may have turned a $10,000 profit on the sale price after one month, but if you have legal, contractor fees and taxes amounting to $14,000, you have lost money. Follow these guidelines for ensuring your investment in a  fixer-upper is succesful.

Do it yourself where you can   
  • Whether you have purchased a fixer-upper or not, consider improvements that will add value such as new cabinets, unique landscaping and modern tiling.
  • Before finalizing your purchase, factor in costs for future labor and materials and consider the time and effort that  you can exert. Gather quotes from local contractors or ask your real estate agent about their personal experience. 
  •  Know what skills you have and to not overestimate your abilities in home renovations as mistakes can be costly. 

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Use help where appropriate
The services of Real estate, legal, and titling professionals will prove to be a worthwhile expenditure, especially during your first property investment.
  • If a real estate agent is able to find you a buyer quicker than you can on your own, paying the commission may be less expensive than the two months of mortgage payments you would pay. 
  • Hiring an attorney to handle parts of the paperwork pertaining to the contract and title allows you time to work on the property and prepare it for the sale. Even more important, if this is your first investment, having a professional advisor may help to ensure that you avoid any legal misunderstandings.
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Title Photo by Doug Geisler

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