Real Estate Investment: Do’s And Don’ts
August 26th, 2009 Categories: Boulder Subdivisions and Neighborhoods, Buyer's Corner, Market Watch, Trends
Investors and first-time homebuyers are often aiming for the same goal: great resale. I witness it all the time; buyers who need a place to live who also want to make money someday. It’s important to know the difference in real estate investment. It’s not always for those of us who need to buy in order to have a place to call home. Yes, you should buy a place in which your investment will grow over the years. However, you need a place that’s livable and suitable to your specific needs. On the other hand, if your angle is profits and returnsand not necessarily a place to live, then you are an investor. This blog with help you either way. The do’s and don’ts of real estate investing in a nutshell.
DO: hire a real estate professional like the Troia Team in Boulder Colorado to assist you in evaluating an investment property.
DONT: buy something with poor sale value such as a location in an area with a high crime rate or near the railroads tracks.
DO: You’ve seen it on HGTV…the “fix and flip”. Investors like to flip a property by buying a property with TLC (but not too much – nothing structural), then quickly renovating it. After promptly putting in back and the market and selling it, the investor profits. Luck is sometimes a factor in this deal but the success mostly comes from market expertise.
DON’T: choose something that needs a lot of structural work or an expensive new roof because these expenses add to your cost.
DO: keep your investment low so you can make a good profit.
DON’T: forget to calculate every expense before you buy. This is how you truly know if you can afford the property and all its unexpected costs.
DO: obey all rules and regulations 
governed by the Colorado Real Estate Commission. Make sure your actions are legitimate and by the book. Again, a great reason to hire a real estate professional to handle the logistics.
Do you like the idea of being a landlord?
DO: calculate in the expenses how long you plan to own the rental. If you only intend on owning it for five years, then you don’t necessarily have to worry about paying for a new roof.
DON’T: forget to add it up. If you want to hold on to the property for 15 or more years, account for that new roof, appliance updates, furnaces, and water heaters. Make sure you’re going to recoup the cost.
DO: develop a network. This is how you find your best deals. Ask your friends, family, and co-workers about preforeclosures, bank-owned, and fixer uppers they may know about.
DON’T: rule out vacant homes you see around the neighborhood and other rentals. Give the owner a call, they just may want to get that property off their hands and sell it to you.
DO: plan for a loan accordingly. Investors need better credit and less debt that other borrowers.
![iStock_000005731631Small[1]](http://blogtherockies.com/files/2009/08/iStock_000005731631Small1-300x201.jpg)
DON’T: underestimate the money you need. A large cash reserve is highly recommended for after the purchase of the home, as well as having a line of credit and one month’s rent for each unit.
