Susan Ormont - RISK VERSUS REWARD: A SIMPLE GUIDE FOR INVESTING IN REAL ESTATE

Conversely, anyone looking in a neighborhood of $100,000 homes can’t afford the $200,000 you would like to charge, or they’re looking for a deal. Therefore, if you go all-in and design and build the ultimate spa getaway in your master bathroom or put in that home theater you’ve always wanted in the basement, you’re not going to get that money back if you’re the only home in the area with those kinds of features. Your home will sit on the market for months until you come down to a much lower price than you would have wanted. To avoid these kinds of mistakes, I recommend making use of a real estate agent, like myself, to help determine the types of renovations you can pursue that will return a substantial amount of the investment cost. Your agent will already be familiar with the general standards of the surrounding area and what price ranges people are looking for. The agent will also be familiar with which improvements bring the best ROI and which styles are currently trending, and will have suggestions on how to accomplish them quickly, including recommendations for reputable, qualified contractors. While you might have been thinking about going full bore and putting in granite countertops and all-new kitchen cabinets — a renovation that would cost thousands — your real estate agent might talk you down to a less expensive solid countertop, a new coat of paint for the cabinets to brighten up the room, and new hardware. Your remodel cost just went down from several thousand dollars and a week or two of to a little more than one thousand dollars and a day or two of time and paying laborers. An agent will also go beyond your neighborhood, looking at how your home compares with similar homes in the larger area. This is important, as your real competition extends beyond what you can see out your front window. 73

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