HGTV's Scott McGillivray Reveals How To Make The Most Of Your Real Estate Investments

Contractor and real estate developer Scott McGillivray has been a fan favorite of HGTV lovers everywhere since he made his first appearance on the network in 2008. As the executive producer and host of several hit HGTV series, including "Income Property," "Buyers Bootcamp," and "Vacation House Rules," McGillivray helps homebuyers maximize their real estate investment property earnings; offering up both investment and renovation expertise from his lifelong career as both a trusted contractor and real estate guru.

McGillivray has spent years on HGTV teaching and empowering homebuyers to make the best decisions financially and aesthetically that will help them cash out on their investment properties. He is now offering specific tips and tricks to help buyers make the most out of their own investments. If you want to buy a new home or are looking for ways to increase the value of your property, these real estate hacks may benefit you.

Scott McGillivray's first and most important tip for maximizing your payout from a real estate investment is to treat it just as you would any other business transaction. Before anything else, he recommends creating a proper business model for any potential property investments by weighing the financial risks involved, according to HGTV. 

Part of this includes doing the math and determining upfront costs, monthly expenses, and interest rates, as well as establishing the funding for the investment. If you plan on getting financing for your acquisition, McGillivray suggests getting pre-approved before you start looking at any potential investment properties. This will help you preemptively determine precisely how much you can afford and can help guide you in the direction of the types of properties you should be looking at.

He also notes that it is best to simply walk away altogether if the numbers don't add up for you to come out on top with any property investment. This explains why it is important to remember that, in the end, buying an investment property is nothing more than a business transaction. It can be easy to fall in love with a house and make decisions based on emotion, which is why McGillivray constantly reminds buyers that the most critical factor is numbers. It's okay to get out of a deal early if you find that investing may not be in your best interests financially.

An investment is only worthwhile if it is profitable; as such, Scott McGillivray says it is vital to determine how you can add value to a property once you invest in it, per HGTV. A lot of resale value comes from curb appeal, so landscaping and other updates to both interior and exterior fixtures and features can help add market value to your home. Keep in mind that the potential increase in value needs to be worth the cost of investing in those updates and renovations.

McGillivray also notes that location is another significant factor when considering resale value. A beautifully updated house at a great price could still have trouble selling if it is not in a desirable neighborhood. Because of the importance that most homebuyers place on location, McGillivray recommends considering factors such as school district and unemployment rate before finalizing the deal. Proximity to public transportation and hospitals are other factors to ponder when determining whether or not a particular real estate investment is sound. 

He adds that a big mistake he often sees investors make is focusing on only the properties close to where they currently live. Having your investment property nearby is undoubtedly convenient. Still, McGillivray also wants people to remember that convenience will not always help you get the most out of your investment. Sometimes, the best investment might be found a little farther away, so don't be afraid to look elsewhere.

We all love a good DIY project, but it's important to remember that hiring someone else to complete aspects of your renovation might be necessary. This is especially critical if you think the result will be of higher quality if someone more experienced and qualified completes the job. Scott McGillivray tells HGTV that the most important aspect of any renovation is completing the work safely, correctly, and efficiently. If you don't think you can do so with your current skill set, leave it to someone who can. This will help give you peace of mind knowing that your property is structurally sound. It will also prevent you from paying more renovation costs to fix things down the road should the job not be up to par the first time around.

Before beginning any renovations or fully committing to an investment, McGillivray insists that every real estate investor should have a complete and thorough inspection of the property. Home inspections help buyers ensure that everything is okay with the house, that it is safe to occupy, and that there aren't any major problems that need to be addressed. Inspections allow buyers to walk away from a deal should they not have the budget for any necessary repairs or if they don't feel like the investment is a good choice for them after learning the results of the inspection.

Scott McGillivray tells HGTV that if you aren't "embarrassed" by how low your offer is, you have offered too much for a property and that buyers should never be hesitant or uncomfortable to make a low bid. It is better to take advantage of an opportunity to get a good deal than to get overzealous and pay more for a property than you would like or can afford.

Similarly, buyers often end up paying more for a property than they should when they know there are other offers on the table or when it's very likely other bids will be made. Because of this, McGillivray wants potential buyers to shed their competitive mindset and not make decisions based on emotion or adrenaline when it comes to making an offer on a property. These types of bidding wars are common in today's market and can prevent buyers from making financially sound decisions. Never maximize your budget just to beat out other buyers.

He also says it's wise to air on the side of caution when it comes to factoring a renovation completion timeline into your budget. The longer you give yourself to complete a project in terms of budget allocation, the fewer surprises you will be in for down the road if you face unexpected delays or setbacks during renovation.