The idea of flipping houses has become a phenomenon in this country. It’s quite astonishing how many would be handymen and women have secret dreams of getting their hands dirty playing with power tools and turning the most rundown house in any given neighborhood and turning it into the diamond they feel it could be. Unfortunately many of these would be ‘flippers’ have no real clue of the task they are considering.

First of all, it is quite possible to make a very good amount of money by rehabbing properties with the intention of selling quickly. The problem with this is that most people who attempt this make one of two fatal mistakes (fatal for the maximum profit potential that they are tossing out the window).

The first fatal mistake they make is that they become emotionally invested in the home they are rehabbing and rather than doing a few simple cosmetic changes and turning the property quickly, the end up doing major renovations, investing a lot of time and money (when flipping properties, time is money, the longer you are working on the home, the more mortgage payments you have to make, the less money you walk away from the close with).

You have to remember that the property you are flipping is an investment and you want to get in, do the work, and sell the house. You don’t have to turn it into a luxury home or even a home that you would want to live in. In fact, you wouldn’t want to do that in certain neighborhoods because you would never recover your investment.

The second thing you must remember when flipping properties is don’t get greedy. Just because you think you could make more money if you added the granite countertops doesn’t mean you can. I’m not suggesting you take shortcuts or do anything that is structurally unsound, but I think you will be amazed at how much less it would cost to resurface an existing bathtub than to replace it.

Want to change the look of a room dramatically without investing a great deal of money? Grab a paintbrush. Changing the color of a room can have a dramatic effect on the overall look of a room. Rather than buying new cabinets for the kitchen and bath, try cleaning the original cabinets and adding new cabinet facings–these are little things that can make a profound difference in the market price of a house. For curb appeal hang ferns on the front porch (if it has one or invest in a little landscaping—just don’t go overboard). Don’t decide that you need 30,000 for a month’s work rather than the 12,000 you were originally hoping for and spend 25,000 to make the 30,000. It becomes a catch 22 when greed kicks in. So don’t get greedy.

Flipping houses is by far one of the quickest ways to amass a serious profit in real estate investing, especially if you can do the work yourself. Just remember to set a budget from the beginning and stick to it. Make a list and don’t deviate for cosmetic reasons (serious problems do occasionally occur and they must be dealt with safely). Don’t get greedy and have fun with it. It’s a learning process and the first experience can be frightening and exhilarating at the same time.

Anyone who has gone to the trouble and expense of investing in rental property is seeking the most return on his or her investment possible. The best advice I can give you though is to invest the extra monthly expenses you would need to go to in order to hire a property manager. First of all, it is money well spent. Not only is someone else sweating the details of whether or not the rent checks are collects, bounced, repairs need to be made, and those infamous late night phone calls, but you are purchasing your personal peace of mind from these details while still enjoying the steady income that comes from having a property rented out.

I think we will all agree that the tenant is the most important part of the equation in a situation where rental property income is relied upon. With no tenant, there is no income. But when you own a property and have a sizeable investment made in that property it is difficult to be objective when dealing with the people who will be living in what you perceive as your home. It is much better to have a casual and more importantly objective observer make the decisions about who becomes your tenant.

If you chose to manage your own property there are some things you want to consider.

1)    Become familiar with the laws in your state about the rights of both tenants and landlords. This is vitally important for you. You must make sure that you are aware of any potential problems before they arise and your rights and responsibilities as a landlord.

2)    Happy tenants equal long-term tenants. If your tenants aren’t happy, chances are they won’t stay around very long. It is much better to have a property occupied than empty. Unless you are extremely fortunate and have a waiting list, it is likely that your property will be empty for at the very least one month, every time a tenant leaves. This gives you time to make necessary repairs, clean, and take care of other issues that are sometimes neglected while tenants are in place. Keep your tenants warm, dry, and most importantly treat them with respect if you want them to stay around for a while.

3)    Perform a thorough background check on your tenants and listen to your gut. If the little voice inside your head is screaming that this isn’t a good idea then it probably isn’t.

4)    Get everything in writing. Get a signed lease that details every conceivable possibility.

Again, I will stress that my personal recommendation is that you hire a property manager to deal with the tenants in order to save you the headaches later on. It’s a relatively small fee considering the hassles it prevents and the peace of mind it provides. If you chose not to, my hope is that the advice I’ve given you will provide some degree of assistance in the way you interact with your tenants.

If you have an even passing interest in real estate investing, perhaps you should consider first investing in a real estate investing seminar. These seminars are generally a few days long and offer a brief oversight into many different aspects of real estate investing. Not only do they show you the things you may have considered before, but also introduce you to new ideas for investing projects, prospects, and financing.

You can find ads for these weekend and daylong seminars at almost every turn on the web. Finding one in your area may be a little trickier. A word of caution though, not all real estate investing seminars are created equal. In fact I would talk to someone who has attended one of the specific seminars that you are interested in attending. Many feel that they have been ripped off by seminars that offer a great amount of hype and only ultimately become a session explaining what should be done but offering no advice whatsoever on how to do it. Many leave feeling very disappointed and as if they have been taken advantage of. These seminars offer big returns but no substance and exist solely for the purpose of making money off of the dreams of others.

Not all real estate investment seminars are put on by crooks, in fact many do offer information that is beneficial to all of those who attend. If you choose to attend a real estate investment seminar in your area, be sure to take copious notes. Check and see if bringing a tape recorder into the seminar so that you may record the session and listen to the information when your mind isn’t distracted by the presence of other people. Ask others what they thought of the information they discovered there and compare notes. Make contacts while attending. One of the most important things to bring away from a seminar is contacts.

The people you meet at the seminar are people who are also interested in some way, shape, form, or fashion in real estate investing. These people are people you should get to know. Some will have experience, some will be completely new, but all will have different understandings of investing and different contacts of their own. They may know a good contractor or other contacts. They also may be interested in investing rather than sweat equity, which you can provide, or the other way around. Seminars can be very much worth every penny for contacts alone.

No matter what your interest in real estate investing, it is most likely worth the cost of attending even if the information isn’t something that is completely new to you. Sometimes rehashing information that you’ve heard before, or seeing it presented in a different manner can make a light bulb go off in your mind. Also by brainstorming among others you can hear different perspectives of a common problem that you may not have considered previously.

But please do due diligence when seeking out the right seminar for you to attend. Find out everything you can about the specific information that will be presented. Call the organizers and ask specific questions and go with an open mind. Don’t attend however, if you truly can’t afford the cost of the seminar. More importantly treat this as a business rather than a hobby and pay close attention to the details rather than paying marginal attention and hoping to glean some tidbit of information.

Investing in real estate is like any other venture you enter into it. It takes blood, sweat, and tears to make it work for you. While it takes a lot of work, it can be a very successful venture. There are many options for investment properties. Whether you are considering property rentals or buying property and fixing it up for resale there is a significant investment not only of money but time as well. No investment venture is going to be successful unless there is a great amount of love and labor involved.

Here are a few tips for investing in rental properties:

1)    Make sure that the area you are buying your rental property in has a very high demand for the type of property you are offering. You don’t want to invest in a family home as a rental property if your market is mostly college students. You could consider subdividing a larger home for this type of market and having two or three smaller rentals rather than one larger rental.

2)    Check the property value in the area you are investing in. You don’t want to choose an area that is in decline for rental properties if you can avoid it. The declining state of the neighborhood will minimize your potential profits.

3)    Be absolutely sure that the income generated by the unit will cover not only the mortgage you are taking on but also the empty times, repair, and upkeep. If you’re investing in a property you want to make sure that you are actually making money.

If you aren’t considering turning your investment into rental properties but are more interested in fixing it up and selling it at a higher rate there are some guidelines you should follow as well.

1)    You must make your best effort to be accurate in your estimate of the work that needs to be done so that you can recoup your expenses and earn a little profit when you turn the house.

2)    You need to educate yourself about the area the home is in. Learn the value of similar houses, or houses in a good state of repair in the neighborhood to see how much your potential profit may be. Remember that it isn’t necessarily a good thing to have the best house in the neighborhood. Potential buyers will assume that the value can’t go up much from that point.

3)    Make sure you have a detailed inspection and are aware of every potential repair that needs to be made, which ones are immediate needs, which ones are cosmetic needs, and which ones can wait. Don’t waste money on the ones that can wait unless they will significantly improve the value of the home. Kitchens and bathrooms are the only ones I would consider for cosmetic needs and structural needs must be addressed before cosmetic needs. Trust me, it isn’t fun hanging drywall twice because the first job was ruined by the new leak in the roof.

Overall, keep in mind that this is about making the most money possible for your investment. Keep the improvements as simple and cost effective as possible and you should be able to enjoy a nice profit. Also keep in mind that it takes money to advertise your home regardless of if it is a rental or you are trying to sell so keep a budget set aside for that. Remember that you will still have to make the mortgage payment even if it sits empty for a while so set your prices competitively for the area. Good luck with your investment and try to have some fun with it.