urchase real estate, make and gain the $50,000 when you
improvements to it and then ultimately sell it. This is a
sell for a tidy profit. smart theory and sound financial
That is how we are all told we strategy when you buy the home.
can make a bundle in real estate,
but it can lead to problems. Let’s assume you live in the home
for six years. Immediately after
Avoiding the Over Improved Home buying, you improve those
horrible bathrooms at a cost of
There are two basic rules in real $15,000. A year down the line,
estate. The first is you should you simply have to have a bigger,
buy in the right location. The better kitchen and spend $20,000
second is do not buy the best redoing it. In the fourth year,
house on the block. Instead, you you find out you are going to
should be a home that needs some have an addition to the family
work. If you then do the work, and spend another $20,000 adding
you will reap the benefits a room to the home and upgrading
through increased equity when you facilities. In year five, your
sell the home. This is all true, salary goes up and you decide
but there is one caveat to the marble flooring would look good
home improvement strategy. People in the entrance at the cost of
often improve their home so much, another $15,000. You have now
they price themselves out of spent $70,000 on improvements for
their market. a market that will only support
$50,000 in improvements. How are
Assume you buy a property in a you going to get the money back
neighborhood where comparable when you sell?
homes sell for $350,000. You buy
a beater home for $300,000. The When buying a fixer upper, it is
goal in buying is to fix it up important to put a plan together
and stick to it. More this scenario plays out over and
importantly, it is vital that you over in the residential real
create a budget and stick to it. estate market.
This may all sound obvious, but
About the Author:
Raynor James is with http://www.fsboamerica.org - homes for sale by owner.
Read more articles by:
Raynor James
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