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The Real Estate Do-It-Yourselfer
16 Oct 2006
Saving a few dollars in renovations can cost you in the long run. It sounds so easy to say you will buy a real estate property at a deal, put a little sweat equity into it and sell it for a fabulous profit. This is much easier said than done unless you really know what you are doing. For the most part it is a better use of your time and money to hire out the job to professionals. The idea behind this is that while you are at the property pulling up floorboards and painting windowsills, there is another investment property that you missed the opportunity to buy. Don’t let the renovations distract you from finding a great deal.
The purest way to profit from your real estate investment is to buy a property that is priced under value but has cash flow potential. In a perfect world you would scoop up the property, pay someone else to fix it up and then rent it out for a monthly positive cash flow or sell it for a substantial profit. However, most of us live in the real world where a deal like that can come along but mostly we have to create the increased value of the property ourselves. One way is a long-term hold so that the property increases in value just by virtue of the present real estate market. If you decide to be a real estate do-it-yoursefler you have to include those costs in your projections and more importantly, if you do the renovations yourself be sure to pay yourself. Your time is the most valuable investment and cannot be bought back.
Rhonda Hoffman
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