“But you must be careful not to over-improve for the neighborhood,” said Lisa Abrams, an agent at Re/Max Realty Services in Bethesda. “You don’t want to wind up being the most expensive house on the block.”
Finally, determine your anticipated carrying costs until sale. Those include the principal and interest payable on the money you borrow to acquire and repair the property, plus the opportunity cost of using your down payment (the amount you could earn if it had been invested in a risk-free investment, such as a bank certificate of deposit). They also include the costs of marketing and advertising, taxes, insurance, closing costs on the buy-and-sell sides, attorneys’ fees, settlement fees, recording and transfer fees and taxes, title searches, title insurance, surveys, permits, inspections and brokerage commissions.