If you are serious about it, one thing you must absolutely know how to do is appraise someone's home value.
Appraising a home is not a simple process and a small error can cost you thousands.
The only values placed on homes are the ones you set yourself.
So, it's best to stay within one or two areas when it comes to real estate investing, at least until you develop a feel for things.
Here are a few great ides to help you hone that appraisal skill.
The first thing you should do is decide which method for appraising you are going to want to use and stick to that.
There are many investors who will get their appraisal by basing it on similar houses in the area.
If this is what you plan on doing, get to know that area really, really well so that you can have an expert knowledge of what numbers you will be dealing with.
Another popular method is to assess the potential income of that particular property.
You will need to consider all factors that may affect the income including potential vacancy, cost of repairs, and how attractive a potential renter might see the house.
If you see that there will be work that needs to be performed to make the house livable, then you'll need to understand the cost and adjust accordingly.
The worst thing you could do is just make a haphazard guess born out of ignorance or laziness; have some real, tangible numbers to deal with when you are appraising.
You wouldn't want to pour your heart, soul and contents of your bank account into a property that will turn out to not be profitable for you.
You'll also need to know the type of value that you will be using to get an appraisal.
If you don't already know, you will need to glean some knowledge on the difference between the appraised value and IRS value of a home; this information is based upon the improvements and value of the land.
The appraised value is essentially just the estimate of the sale price; this is not necessarily what it will sell for.