Biggest Home Improvement Mistakes For A Real Estate Investor

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.

Home Improvement Loans – 7 Tips You Should Consider When Getting Home Improvement Loans

From time to time it becomes necessary to acquire home improvement loans to help you “upgrade” your house. Whether you are renting the house out to tenants or you live in the house yourself, home improvements always add value to the property.

There are many home improvement loans you may decide to go after depending on your circumstances such as your credit score and the amount of down payment you may have. You also need to check on other requirements of the type of loan. Here are 7 practical steps you can take to get a home improvement loan approved.

1. Know How Much Money You Need to Get from Lenders.

Determine which areas of the house need improvements. Get contractors to give you an estimate of what needs to be done and how much it will cost to have them done. This will give you a rough idea of how much you need to borrow.

2. Documentation.

Put all the needed documents that lenders require together. These usually include tax returns, prove of employment, income in the form of bank statements and other data such as your debt-to-income ratio.

3. Know Credit Rating.

You are entitled to a free credit report from the credit reference agencies each year. So request a copy of your report. Go through carefully and if you see any mistakes, file a dispute with the appropriate agency to have the mistake removed. This would improve your credit score.

4. Look for Appropriate Lenders

Look for reputable lenders to borrow from. Know the average interest rates and the rates at which you are being offered the loan. Stay away from lenders whose credibility you cannot establish. If their offer is too good to be true, they probably are. If you make your application online, protect yourself against identity theft.

5. Home equity loan or home equity line of credit?

Each of these are somewhat like a second mortgage. Which one you go for is entirely up to you. A home equity loan is a lump sum of money with a fixed interest rate. It is based on the equity of the home you want to make improvements to. On the other hand, a home equity line of credit has a variable interest rate based on the principal (i.e. loan amount). A home equity line of credit is similar to a credit card, where you pay interest on the amount of money you take from the line of credit, calculated every thirty days. Talk to your banker if you do not understand any of these fully.

6. Understand Everything Before You Sign.

Unfortunately, many people never read the fine print because it is time consuming and boring to read. However, the little time you spend reading the terms of service of the lender is nothing compared to the money you will have to pay if you did not understand something and signed anyway.

7. Create a Budget.

Getting a home improvement loan means you are getting a second mortgage on your house. If you default you stand to lose your home. So create a budget to ensure you make your payments on time without any defaults. It will let you know how much money you can afford to put towards making repayments.

These are some of the best steps you need to consider when you are preparing to get a home loan meant to help yo improve you house.

Five Things You Need Before Do It Yourself Home Improvement

Do it Yourself, or DIY, is an increasingly popular trend in home improvement: it allows you to think outside the tool box. As many people question why they should hire someone else for things they can do themselves, projects are taken on by home owners instead of contractors. While DIY does have its advantages, it also has disadvantages. On the negative side, DIY projects require much more preparation than simply hiring help. The following is a list of five things you need to keep your DIY from being DOA.

A friend with a truck: There is a reason people with trucks sometimes have bumper stickers reading, “No, I will not help you move.” When engaging in any activity that involves carrying loads, a friend with a truck automatically becomes your BFF. Some home improvement jobs might not require hauling large items, but when you begin a project that does, knowing someone with a truck will save you time, money, and any potential damage you might accrue shoving a pile of lumber into your Pinto.

A hardware store with a knowledgeable staff: When it comes to DIY projects, a good hardware store is your Mecca, and a place that will become your second home. Luckily, hardware stores, particularly the bigger chains like Lowe’s and Home Depot, are geared to helping the nonprofessional. Not only are these places staffed with the handiest men and women, but they also hold seminars and have several books and educational materials dedicated to the art of DIY.

A good tool collection: Home improvement projects aren’t ones in which you should skimp: the point is to improve your home, not the opposite. While buying top of the line materials is important, using top of the line tools is as well. It’s hard to do a good job if you are working with tools that don’t. If your tool box is missing essential pieces, filled with very old and dull tools, or is the color pink, upgrade your tool collection before you begin your DIY project.

Patience: Ah, patience: if it could be put in a bottle and sold on store shelves the world would be a much better place. But, alas, patience is something we just have to teach ourselves. DIY home improvement projects have the potential to test patience in anyone. These projects can be frustrating, annoying, and go completely wrong. For this reason, it’s important to remind yourself to take a deep breath, relax and read the instructional manual before you begin. Reading it afterwards just doesn’t seem to have the same affect.

A Permit: Some home improvement projects can begin without a permit. Others, however, require one. Making certain changes to your home that could affect your house’s structure, or affect your neighbor’s happiness (such as putting up a hot pink fence) may require a permit. These requirements can vary by state so before your begin your DIY project check with your local government and make sure your bases (and something else) is covered.