Real Estate Investing

So you think you’re cut out to be a general contractor, architect, house flipper, or to simply build your own casa. You might want to first try Build-a-lot, the intriguing little game that hit retailers last month packaged with the enticing motto “Become Your Own Real Estate Tycoon.”

While this game is probably as similar to actual real estate dealings as Guitar Hero is to an actual rock ‘n’ roll guitar solo (i.e. not at all), it has been getting rave reviews. Users of Yahoo!, where the game first debuted for download, gave the game a rating of 4.5 of 5 stars. This genre of games, called “casual games,” are those typically played on PCs with little long-term dedication or special skill requirements. Statistics show they typically fare much better among women, MarketWire.com reports, but Build-a-lot has attracted a large male fan base as well.

The long and short of it is that players are charged with increasing property value by improving the property itself and building up the surrounding area. Buy, sell, build, renovate till your heart’s content. As the game progresses, you will even have to deal with actual problem-solving scenarios.

If this isn’t enough, try your hand at the newer Build-a-lot 2: Town of the Year. In this sequel game, the “Curb Appeal” feature appears and such cumbersome worries as building permits and property taxes disappear. You must keep your curb appeal up if you want to keep your property value high, and that means building in the right area, away from industrial development. Kudos to HipSoft for developing a fun game around a topic that is often very intimidating for many people. It may decrease some of the mysteriousness typically associated with real estate and development, but it could also take the self-proclaimed “experts” down a notch or two when they discover it’s not as easy as it looks.

For homeowners or renters getting spring fever and turning a watchful eye toward the MLS listings, there are many options. With the housing market in its current condition, the prospect of building or buying can be very unnerving. But if your determination and finances are there, now just may be the time to go for it. Here are some good reasons to get started, relevant to the housing market’s current condition:

Building

Because of the recent housing slump, the cost of materials, supplies and labor have decreased significantly. Contractors will be oh-so-ready and willing to pay attention to you and your house-building project because new construction starts are down across the country. The cost of land will also be down, and anything you do now will only increase in equity.

Buying

As a homebuyer, you are still in the catbird seat, which is always a great place to be. It’s not too late to exercise your negotiating powers and score a great deal. Act now to get more house and more land for your money — not to mention more home equity in the future when the market recovers. Even realtors fees will be negotiable because, like contractors, their workload has decreased lately.

Stay put

If you are a homeowner, you may be hesitant to part with your investment during this turbulent time. It’s like selling stock in a perfectly stable reputable company just because the stock market is down. If you wait long enough, it’s going to recover and your investment will be valuable again. All local real estate markets differ and yours might not be so bad. But if it looks as though you stand to lose money on your home, whether you’re upside down in payments or your home equity has decreased significantly, you may want to just stay put. Consider refinancing or waiting for the market to improve, and put any extra money you can scrape together toward paying down the home loan or fixing up the house and increasing equity (especially bathroom and kitchen remodels).

So you are ready to build your dream home, and you think you have what it takes to oversee the project yourself. Many a dreamer has thought the same, only to wake up months later, finding themselves eating Ramen noodles under a half-finished roof. For a variety of reasons, custom-building can vacuum up more money and time then you could imagine. No wonder it’s a leading cause of divorce, right?

Still determined? Here are a few things you should know:

Overbudget

Whatever you think your house will cost, plan for more. However long you think it will take to complete, plan for longer. True, you can save up to 20% by acting as your own general contractor, but this can be overrated. For instance, what happens if you don’t know anyone in the building industry and you get ripped off? What happens if you fail to comply with codes and regulations, simply out of ignorance, and must pay a fine? These are just a couple scenarios where a contractor who is in the know can really help you out.

Kiss your free time goodbye

As a general contractor, you would handle all purchasing, scheduling, subcontractor management, etc. Home builders with the skills and experience may choose to save even more money by doing certain smaller tasks themselves like countertop, insulation or flooring installation. This is a tremendous time vacuum. Even without individual DIY projects on your plate, as the overseer you will need to be available around the clock by phone at least. Ideally, you would check in on the job site once or twice daily. In other words, your work productivity and your family life may suffer.

Find the right approach for you

Maybe you’re a paperwork guy, or maybe you’re a muscle guy. Maybe you’re a framer or electrician. Find your niche and help in that way if you want, but essentially just be prepared to manage the daily activity on-site. You are the coordinator, and it generally works out better if you know the subcontractors personally or they were recommended through a friend. More than one home builder has seen a sub leave them high and dry mid-project.

Plan thoroughly

Above all else, fail to plan and plan to fail. Approach your project with a timetable already drawn out, with different tasks scheduled for certain dates along the way. Research the different stages of house building and plan it out like a storyboard. Though upfront planning is important, be prepared and willing to change plans mid-stream. Managing such a large project is all about flexibility, thinking quick on your feet, and being positive, patient and solution-oriented. Don’t get too hung up on the small mishaps here and there. They will occur, but don’t allow yourself to lose sight of the big picture.

Be honest

Push all thoughts of saving money aside and take an honest, objective look at your abilities and skills. Are you a good manager? Do you loathe procrastination? Do you pay attention to details? Do you possess patience and people skills? Are you a good money manager? Are you prepared to dedicate the time needed for such a job? These are the basic factors to consider when deciding whether you should manage your project. If the answers to these questions are yes, then proceed with cautious confidence and enjoy the ride.