Scott McGillivray is a Canadian businessman, expert real-estate investor, television host, skilled contractor, author, and educator. Scott was a judge on HGTV's Canada's Handyman Challenge along with Mike Holmes and Bryan Baeumler and HGTV's All American Handyman with Mike Holmes. His HGTV series “Income Property” has taught many homeowners how to generate income from their homes and take control of their financial futures.
Scott holds educational sessions and workshops throughout North America where he discuss the topic of creating wealth through real estate and he teaches new real estate investors how they can create wealth with income properties. His passion is in educating homeowners to make smart renovation and investment decisions that deliver financial rewards.
Here are some tips for successful real estate investing from HGTV star Scott McGillivray:
Do the Math Calculation
When you are thinking about buying a property you have to do the math. “Using cash flow as an indicator to whether a property is a good investment or not helps protect a buyer from being stuck in a scenario where not only is the value not there, they’re actually losing money.”
Scott says “When investing in a property you have to fall in love with the numbers, not the house, because if the numbers don’t add up you’ll end up losing out”. Calculate your potential expenses when thinking about buying a property. Then get your contractors and bring them through the property before closing to get quotes. "If you start trying to get everybody together after you close, you're going to be scrambling," says McGillivray.
Determine How to Add Value to the Property
Investing in a property through upgrades and renovations is a great way to increase the value a the home. You should think about how you can add value to the property because a property that doesn’t go up in value isn’t a worthwhile investment. How can you do this? Scott says “It’s doing the right renovations that provide value to the people.” Improvements such as: new kitchen/bathroom fixtures, new flooring, new neutral paint, and additions to curb appeal.
Be sure you get the best return on what you are going to renovate in the property. Consider the costs of the home improvements you are wiling to do against the prospective rise in value to determine what you should spend to renovate the property. Scott says,“ if you can’t buy it and fix it up for less than what they’re selling for in the area, it’s like pushing water up a hill. It’s not going to happen.”
Choose the Right Location
When you are choosing an investment property don’t limit the property search to areas close to your primary residence. The right neighborhood for real estate investing is one with good opportunity for growth. Look for things like good schools, colleges, hospitals, and great transportation systems. “When you are buying an investment property, it is a little bit different than just looking for a home," says Macgillivray.
Be Aware of Timelines
Once you own the property, start the work immediately. You are supposed to be focusing on doing the renovation, not pre-planning it. Be aware of the timelines you have scheduled for your renovations because the more time it takes to be done, the more it will cost you. "What you have to be careful of is time," says McGillivray. "Time is your enemy. The longer your renovations take, the more carrying costs you will have such as paying the full mortgage and any utilities. Time is money”. “It’s a mistake I see people make over and over again and it can be easily avoided with the right planning and budgeting.”
Don’t Cut Corners
Do it yourself home renovations can be persuasive when the cost of hiring a pro goes beyond your budget. Doing home renovation projects yourself will save you money, but paying a professional will result in better work being done in a shorter period of time”, says McGillivray. “When planning out your budget make sure to account for any trades you have to hire”. During a home inspection a poor DIY workmanship project is easily noticeable and when it's time to redo the job, it will cost you more then what it would have initially cost you in the beginning by pro. Scott says, “Cutting corners will always cost you more in the long run.”
Invest for the Long Term
If you are thinking about investing in real estate, think about investing for the long term. Scott says, “becoming a real estate investor requires a certain amount of know-how and a whole lot of pre-planning; it takes years of hard work, sacrifice, and dedication to become a successful real estate investor.” "Real estate is a get rich slow not get rich quick investment. If you try to get rich quick, you are going to get burnt."
Making money from real estate investments is not guaranteed because there are a lot of factors to consider when buying a property, especially when it comes to selecting the right properties to invest in. With proper planning and research, investing in real estate and owning income properties can be a great way to make money and secure your financial future.
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