The Do's and Don'ts of Buying Investment Property
LOUISIANA REALTORS • July 17, 2017
Investing in real estate
can be a great investment. Not only can it grow in value over time, but it can also provide a continuing income source. However, as with any investment, it is important to understand the risks. Unlike the stock market, where you can invest in smaller increments, real estate requires a much more significant investment. Here are few things to make sure that you do, and few to avoid before you buy your first investment property.
Do Make Sure an Investment Property is For You
Owning a second home means even more responsibility, especially when it comes to repairs and maintenance. Handling these tasks yourself can save a lot of money. It’s important to consider the extra time and cost of owning a second property before you commit.
Don’t Try and “Flip” a Property
While this may seem like a fun way to turn a profit, at least for your first investment home, this is not a good idea. The cost of doing a major overhaul on a property can easily get out of hand, making it even more difficult to get your money back from a rental or even a sale.
Do Hire a REALTOR®
Just as you would with your primary residence, seek the knowledge and expertise of a REALTOR®. Understanding market value is crucial when it comes to investing and knowing what areas are growing, and what areas aren’t can position you for a successful investment. REALTORS® also have strong professional networks. Mortgages for investment properties are different than for your primary home, so having access to mortgage brokers, banks, and other professionals can help you get the best deal.
Don’t Underestimate Your Margins
Obviously there will be costs associated with owning this second property and it’s vital to understand them all to ensure that you are earning a return on this investment. HOA fees, insurance, and maintenance will all eat in to your bottom line. It is also a good idea to budget, save, and plan for any major repairs and for vacancies when you won’t have a revenue stream, but will still have these obligations.
Investing in real estate can be fun, exciting, and lucrative. Before you jump in feet first it is important to understand the ins and outs of owning an investment property in terms of everything from responsibilities, liabilities, costs, and management.
A major change to residential appraisal reporting is approaching, but a recently announced temporary policy exception is creating some confusion about what happens on November 2. Here is what REALTORS® need to know. Beginning November 2, 2026, Fannie Mae and Freddie Mac will require the new Uniform Appraisal Dataset (UAD) 3.6 for new appraisal reports initially submitted to the Uniform Collateral Data Portal (UCDP), unless the lender has received a temporary policy exception. The November 2 implementation date has not been postponed. What is the UAD 3.6 Appraisal Report? UAD 3.6 replaces the familiar legacy appraisal forms (used for the last 25 years) with a new, more data-driven appraisal report that collects much more detailed property information. For REALTORS® and consumers, the transition could mean a more detailed property inspection, additional questions about the property and transaction, and potentially longer appraisal and review times as appraisers, lenders, appraisal management companies, and other industry participants adjust to the new system. What changed? Fannie Mae and Freddie Mac recently announced a temporary policy exception for eligible lenders that need additional time to complete their transition to UAD 3.6. Lenders receiving the exception may continue submitting appraisals using the current legacy UAD 2.6 format through May 19, 2027 . Beginning May 20, 2027 , new appraisal submissions to Fannie Mae and Freddie Mac must use UAD 3.6. What does this mean for REALTORS®? For several months, REALTORS® may encounter both the current appraisal format and the new UAD 3.6 appraisal report. The appraisal format is determined by the lender's assignment requirements. REALTORS® and consumers do not need to determine which format should be used. It is also important to understand that an appraiser completing a legacy-format appraisal during this period should not automatically be assumed to be unprepared for UAD 3.6. An appraiser who is fully UAD 3.6 ready may still be instructed by a lender to complete an assignment using the legacy format. How can REALTORS® help? Good communication and accurate property information will become even more important. REALTORS® can help the appraisal process by providing accurate and specific information concerning: Recent renovations and improvements Property features and amenities Sales concessions and financing terms Known property conditions or unique characteristics Relevant information about the transaction Buyers should also be encouraged to discuss appraisal requirements and anticipated timelines with their lender early in the transaction. What about FHA, VA and USDA? The November 2 requirement discussed above applies to Fannie Mae and Freddie Mac conventional lending. FHA, VA and USDA have their own appraisal policies and implementation schedules. Their transition to UAD 3.6 should not be assumed to follow the same November 2 timeline unless announced by the respective agency. The Bottom Line November 2 remains an important date for UAD 3.6. The temporary exception does not cancel or postpone the transition. Instead, it allows eligible lenders additional time to complete their transition. As a result, REALTORS® should expect a period when both legacy and UAD 3.6 appraisal reports are being used. Louisiana REALTORS® will continue monitoring the transition and providing members with updates as additional guidance becomes available. Louisiana REALTORS® is also planning a follow-up webinar to discuss the latest UAD 3.6 developments, what REALTORS® are seeing in transactions, and what these changes mean for agents and their clients.
Louisiana REALTORS® wraps up the 2026 Fall Governance Meetings in New Orleans! Louisiana REALTORS® gathered in New Orleans September 29–October 1 at Harrah's Hotel Tower at Caesars for the 2026 Fall Governance Meetings, three days filled with professional development, governance, networking and celebration. The conference opened with the conclusion of the 2026 LR Leadership Program. Participants graduated from the yearlong program at a closing retreat, followed by a luncheon with LR officers. The 2026 graduates include: Meghan Adam, Scott Domingue, Nichole Donald, Herbert Dubuisson, Clint Galliano, Beth Graham, Ivan Jennings, Catice Johnson, Dana MacCord, Candy Modeen, Craig Morris, Ron Patron, Amber Reinking, David Rollins and Jennifer Tagliarino. That evening, the Welcome Reception at Stadium Club at Mannings celebrated the graduating class and brought back alumni from previous years for the LR Leadership Reunion. Tuesday's education kicked off with a live "Residential Real Estate Economic Update" from NAR Chief Economist Dr. Lawrence Yun, giving attendees an expert look at the trends shaping the market. Members who joined early for the Commercial Symposium on September 28 got a head start on the week. Wednesday brought a full day of learning and connection. After a breakfast buffet, Robert Siciliano led "CSI Protection: Cyber Social Identity and Personal Protection," equipping attendees to defend themselves and their clients against today's cyber threats. The Town Hall Luncheon followed, along with the Local AE Meeting and the YPN Open Meeting with Panel Discussion. Leigh Brown's "Fearless Agents" session gave REALTORS® the confidence and strategies to stand out in a shifting market. Wednesday night, members celebrated the 2027 Louisiana REALTORS® Officer Installation with a ceremony followed by The Sidewalk Step Second Line through the streets of New Orleans to Vue Orleans, where the evening continued with a reception. Thursday opened with Leigh Brown's "Next is Now," a session on rebuilding trust through availability, action and discipline. Regional caucuses followed, and the Board of Directors Meeting brought the governance portion of the event to a close. At the meeting, Cindy Dyer, [Northwest]; Mark Ouchley, [Northeast]; Lacy Baaeth, [Greater Baton Rouge]; Bill Boyd, [Bayou]; Marsha McGraw-Barbera, [Greater Central] and Candy Modeen, [Northshore] were elected as 2027 At-Large Directors. They will join the 2027 Board in helping guide the association and represent REALTORS® from across the state, serving a two year term. Attendees could also earn up to six hours of CE throughout the conference. Louisiana REALTORS® looks forward to hosting REALTORS® from around the state at the Winter Conference at the Golden Nugget in Lake Charles . We would like to thank our sponsors for their generous support in helping make this conference happen! Our Vue From the Top Sponsor: New Orleans Metropolitan Association of REALTORS® (NOMAR); Grand Marshall Sponsors: American Home Shield, Arena Collective, First American Exchange Company and Guard Home Warranty; Second Line Sponsor: Zillow; Brass Band Backer Sponsor: REALTOR® Association of Acadiana and Roy Appraisals, Inc.; and Sidewalk Stepper Sponsors: Bayou Board of REALTORS®, Bob Brooks School, Compass Inspection Services, LLC, Expert Insurance Services (EIS), LLC, Goosehead Insurance Brandon Katz, Greater Central REALTORS® Association, Hartwig Moss Insurance Agency and Women’s Council of REALTORS® New Orleans Metropolitan Area.
How can a REALTOR® help you get more value from your home purchase? Learn how REALTORS® can guide buyers through market research, negotiations, long-term value, and the homebuying process.
