Real Estate Investing Education
Article 4: Education in Real Estate Investing: Your Home Improvement Best Return on Investment
Article 5: Free Home Buying Advice: What Your Neighbor Paid for His Home
Education in Real Estate Investing: Your Home Improvement Best Return on Investment
by Mike Palmer
Consumer Reports magazine recently detailed an unbiased look at remodeling. What they found was an important nugget of education in real estate investing: First and foremost, don’t believe the hype when evaluating your home improvement best return on investment. While you hear stories of friends buying a fixer-upper, slapping a new coat of paint and putting down new carpets, and turning it around for fast profits, it’s rarely that easy. You may not be getting the full story there. The surprising truth of the matter, according to Consumer Reports, is that “remodeling and upgrading are generally poor investments.”
“Even kitchens and bathrooms, long considered the most profitable improvements to undertake, [recover] only 50 to 75 percent at sale – and only if you sell a year after the remodeling is complete,” says the study.
What renovations add the most value? Your best investment in home improvement is to ADD SQUARE FOOTAGE to your house. Adding more room is most likely to add value. But there’s a caveat here – this works only if you’re bringing your square footage up to neighborhood standards. According to Consumer Reports: “You’ll get the biggest bang for your buck by keeping up with the Joneses, not by going them one better.”
“Over-improvement yields diminishing returns. So don’t add an in-ground swimming pool or a third story if you’re the only one on the block to have one. Refrain from exotic decorating. [And] don’t undertake a big-ticket remodeling project if you plan to move within a year – you won’t have the time to enjoy it, and new owners will most likely want to do something different. Instead go for maintenance and repairs, clear clutter, and paint.”
Our recommendation for your home improvement best return on investment? Scope out your neighborhood’s recent and historical home sale prices, factoring in any additions or projects that may have added or diminished their sale prices.
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Free Home Buying Advice: What Your Neighbor Paid for His Home
by Mike Palmer
If you’re looking to buy a house, here’s some free home buying advice and a valuable tool you’ll want to use. The folks at Motley Fool have put together a website database of purchase prices for more than 20 million homes recently sold across the United States.
You can use it to find out what just about any home was sold for. It’s a great way to compare prices. Your real estate
agent can do the same thing through the Multiple List Service, but this database allows you to quickly do your own research. You can search the database by street, price range, or by a specific address. The site claims to cover “over 84% of the top metro areas in the county, and 80% of the U.S.”
The only problem with this database is that you’ll have to wait at least six weeks from a house transaction’s closing date to see the price appear. It’s free, by the way. Go to http://fool.homepricecheck.com/.
Discover additional gems of real estate secrets, articles 6-8, from Dr. Steve Sjuggerud and Mike Palmer, or return to real estate investment advice articles 1-3.
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