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Submitted by: Darrick Scruggs
Are you a real estate investor, or do you want to be one?
Here are over seven (7) tips for real estate investors that will increase your chances of making and keeping a profit with your investment property.
1. Plan with the end in mind. Before you buy a property, make sure that you know what you want from that property. Do you want to renovate it so that you can resell it to someone else at a higher price? Are you looking to fix it so that you put a renter into it? Do you want that renter to be a Section 8 tenant? Depending upon your answer, this will affect how much your repairs will cost and how much money you expect to make from the investment. A property might be good for one type of investment but not another type. Take time to determine this in advance.
2. Pad your repair estimates. Before you buy your home, make sure that you have some idea how much repairs will cost you. Once you do that, add some more to that estimate. Another words, pad your estimate. If your calculations show you making a profit even after you pad your estimate, then you might have a winner. Ask fellow investors whether they ever had unexpected additional expenses after they tore into the house. You want to make sure that you have enough money for this if it happens; otherwise, you will have a home that keeps costing you money but never makes you any money. If you do not need to have any extra repairs, then you have extra money. This is much better than having a half-done property without having any more money. These become a perfect buy for another investor, because you will be eager to get rid of it. Don t be that investor.
3. Pay an inspector to review the home before you buy it. Depending upon your area, it will cost you around $250 to $350 to have this done. While it is never fun to pay more than you need for something, paying an inspector can save you from making buying a property that would have cost you thousands more than you estimated. That can make the difference between buying a profitable investment and buying a cost drain. Make sure that you are not jumping over thousands of dollars to save a few hundred bucks. If you can t afford the inspector, you probably cannot afford the investment property. Paying for an inspection is excellent defense.
4. Pay a professional to repair your home. Don t do it yourself. There are a lot of beginning investors who think that they will save money by doing all of the repair work themselves. What they fail to consider is that it usually takes them a lot longer than a professional. This alone adds to holding costs, the costs involved when you own property but nobody is paying you. It just keeps costing you money. Another reason to hire a professional is that they are less likely to overlook small things that add to big things later. Plus, catching things early in the repair process reduces the chance that you will need to redo the repair, increasing the repair cost and the time before your property makes you money.
5. Do mechanical repairs before you do other repair work. Most contractors make a mess, especially the ones who work on mechanical things. Appearance is not their focus. Sometimes, they will even damage drywall. Even though you never want them to damage things, it is much better for them to rough up your home before you bring in the dry wall hangers, for instance. Schedule your contractors to do cosmetic repairs only after you know how much total damage there really is.
6. Use good quality interior paint. When you buy paint for inside your property, make sure that it is good quality paint. While you can spend less on paint, it will not lower your costs. Good quality paint usually requires just one (1) coat. Poor quality paint might require three (3) coats. Not only will your contractors appreciate it, it will take them less time to finish, which means it will take less time before your home is ready to sell or rent. Isn t that when your investment begins to repay you?
7. Use two-tone paint inside your home. Sure it costs more, but most people find one paint tone to be too industrial. Homes with two-tone paint gives most prospective buyers or renters a warmer feel. Most buyers make the buying decisions based on emotion, and a warmer paint job gives most people this warmer feeling they need.
8. Replace galvanized pipes. Even if it does not look like you need to replace these pipes, they are old. They probably need some serious plumbing, anyway. Replace them with PEX or PVC, and it will not be very expensive, and it will provide a selling point. You can advertise that the home has “new plumbing”.
About the Author: For more tips and information about investing in homes for sale in Farmington Hills MI or anywhere else, you can visit
HomesForSaleInFarmingtonHillsMI.com
, send an e-mail to FarmingtonHillsHomes@gmail.com, or call (248) 796-8616.
Source:
isnare.com
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