As a real estate investor it is sometimes a good investment move to make home improvements to any real estate properties that you purchase. There are several mistakes that commonly occur involving home improvement and real estate investing, and by knowing what these mistakes are you can save a lot of money and aggravation. Let the mistakes that other real estate investors have made be your guide on what to avoid.
The first mistake that some real estate investors make is to buy a property in a bad location or for more money than the house is worth. No matter how many home improvements you make on one of these properties it is unlikely that you will recover a decent profit or even your investment back. Always consider both of these factors before deciding to invest in the property and make home improvements.
A big mistake that many real estate investors make when they are doing home improvements is not knowing or finding out about the building codes in their area. Some investors do not obtain the necessary permits that are required by the city where the real estate investment property is located. This is one of the biggest mistakes, and it can cost you plenty if you make it. The building inspector is there to make sure that the home improvements are safe and done properly. If there is a permit required and you neglect to get one, you may be required to tear down any work that was done, get the permit, and then start from scratch.
Under budgeting for the home improvement project is another common mistake made by real estate investors. The old saying was to take the costs and triple them. That is an exaggeration but not by much. Most investors do not make a full detailed budget of what is needed for the home improvement project down to the last nail and staple. By being realistic and budgeting for all possible materials you will have a more realistic budget and are a lot less likely to go over budget. You should also plan for any unexpected eventuality that could occur and plan for it in the budget as well to avoid any unexpected and costly problems.
The single biggest mistake that real estate investors make is trying to save money on home improvement by doing projects themselves when they are not qualified. There are some projects that should have a licensed contractor or repairman on them. Many home improvement projects can safely be taken on by an amateur and turn out beautiful, but some projects like a new roof or any other extensive renovations should only be done by experts. This is because there are many safety issues involved in these projects, not just for the person doing the job but also for any tenants or owners who live in the house.
By avoiding these mistakes you can save a lot of money on your real estate investment. Know the value of the property before you purchase so you do not pay too much, and make sure that the location is decent. Make sure that your budget is realistic and that it takes into account every possible piece of material and cost. Also make sure that you factor in any possible unexpected cost or problem. The biggest mistake to avoid is to know when you should call for professional help and when you can safely do the home improvement project yourself.