Scott McGillivray's Top 12 Tips for Investing in Real Estate

The host of DIY Network's Buyers Bootcamp, Scott McGillivray, offers up some advice before you hand over your Benjamins. 

Scott McGillivray’s latest series, Buyers Bootcamp, follows rookie investors looking to buy a home, fix it up and then cash in — all with Scott’s help, of course. But no one said making that initial investment would be easy, so before you zoom out the front door, checkbook in hand, you might want to keep reading.

Here are Scott’s best tips for investing in real estate, from putting together a great business model to realizing it's OK to throw in the towel and walk away.

1: Create a Proper Business Model

“Real estate investing is like any other business. If you want to be successful you need a proper business model. Look beyond the basic costs and ask yourself some questions:

What’s the purpose of the investment?

What are some of the challenges you could face?

What are the upfront costs?

What is your source of funds?

What are the fixed monthly/yearly costs?

What are some variable costs? For instance, what about interest rates? If they change, how will you deal with it?

What are some potential problems that could derail your plans, and how could you avoid and/or fix them?”

2: Do the Math

“I always say that when investing in a property you have to fall in love with the numbers, not the house. This is probably the number one mistake rookie investors make. Calculate everything from the monthly costs, to the fixes you might have to do, to the potential profits. Crunch all of the numbers and if at the end you don’t see a plus sign, don’t do it — no matter how much you love the house.”

3: Get Pre-Approved Before You Start Looking

“One of the most important elements in the process of purchasing a property is getting pre-approved by your bank or mortgage company. Too many people start looking at properties before they know exactly what they can manage, which often leads to either disappointment or spending more than they can afford.”

4: Choose the Right Area

“A lot of new investors make the mistake of limiting their property search to areas close to their primary residence. While living close to your investment property can have advantages, sometimes better investments can be found further away. Remember that a desirable neighborhood for real estate investing is one with good opportunity for growth. Look for things like post-secondary institutions, hospitals, low rates of unemployment and great transportation systems.”

5: Determine How to Add Value

“A house that doesn’t go up in value isn’t a worthwhile investment, so think about what you can do to add value. Consider any potential updates, from general upgrades such as new fixtures and fittings to additions to landscaping and curb appeal. Weigh the costs of the upgrades against the potential increase in value to determine what you should spend.”

6: Get a Home Inspection

“Always get a home inspection. Full stop. Home inspections give you peace of mind if everything checks out ok, give you a bargaining chip if there are problems and give you a clear signal to run away if the problems are out of your league. They also clearly map out where you’ll need to invest money into your home over the next five to 10 years, which is vital for budgeting and planning.”

7: Don’t Be Afraid To Go Low

“Don’t pay too much money for a house simply because you’re uncomfortable or embarrassed to make a low offer. Someone once told me that if I wasn’t embarrassed by my offer, I had offered too much. That has stuck with me over the years and I’ve gotten some great deals because of it.”

8: Don't Get Caught in a Bidding War

“In today’s market bidding wars are common, but purchasing a property is not a competition. If you pay too much for a property you end up losing. Never let your emotions get in the way of making smart financial decisions. Being a successful real estate investor means making intelligent, emotion-free decisions.”

9: Be Conscious of Timelines

“Time is money. Be conscious of the timelines you set because the longer you work on a renovation the more it will cost you. Not only are you paying for the renovations, as long as you lack tenants or are unable to put the house on the market, you are paying the full mortgage and any utilities. It’s a mistake I see people make over and over again and it can be easily avoided with the right planning and budgeting.”

10: Don’t Cut Corners

“DIY’s can be tempting when the cost of hiring someone extends beyond your budget, but it’s very important that things get done right the first time. Cutting corners will always cost you more in the long run. When planning out your budget make sure to account for any licensed trades you have to hire.”

11: Don’t Be Afraid to Walk Away

“If the home inspection proves to be scary, or if you find you’ve gotten into something you can’t handle, don’t be afraid to walk away. Buying a house is an emotional roller coaster and it’s really important to keep a level head and not get caught up in the emotion. Even if you’ve put some money into the inspections and other fees, it’s better to get out early and take the loss than get stuck in something you can’t handle. It’s okay to find a house and then lose it. There are plenty of other houses out there. You’ll find a property that works for you — just be patient!”

12: Talk With Other Investors

“Throughout the process, talk to other real estate investors who have been through it before. Join a real estate club or organization where you can talk with fellow investors and learn some tricks of the trade. These types of forums are great for networking and learning about the local markets.”

Tune in to Buyers Bootcamp on HGTV Saturday, Oct. 1 at 1p|12c. And for more Buyers Bootcamp, head over to

Sneak Peek: Modern Makeover for a Dated Bungalow

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Dated Corner Bungalow

Scott invested $60,000 of his own money into the property. Was it worth it? Let’s find out. 

Before: Kitchen

The kitchen, a.k.a. the most important room in the house, was in need of a little TLC. Outdated cabinetry and appliances as well as lackluster flooring needed to be replaced in favor of more updated features. 

After: Kitchen

Now, this kitchen is the crowning glory of the home. With up-to-date stainless steel appliances and gorgeous white cabinetry, it truly glows. 

After: Kitchen

This designated space for dining has a built-in bench with added secret storage. 

Before: Living Room

The living room left much to be desired, but there was potential brewing beneath the tired paint job and vertical blinds. 

After: Living Room

The living room feels open and airy with brand-new French doors leading out to the deck, and the carefully-selected furniture really brings the room together. And with the addition of hardwood flooring throughout the home, the price point for potential buyers just keeps going up!

Before: Outdoor Space

A deck is the perfect place to entertain friends and family, but this one was in need of some love. It wasn't just the deck that needed improvement, though: The house is also on the corner of a very busy street and there was no fence, making it feel exposed. 

After: Outdoor Space

Luckily, the gang put their heads together to come up with a solution to clean up the outdoor area. The plan: A fresh color on the deck and new fence (which was pricey, but so worth it) to give this yard serious curb appeal.

Before: Master Bedroom

What was lacking in the home was a true master bedroom. But with a few adjustments, this room fit the bill — if only it had a bigger closet…

After: Master Bedroom

Wish, fulfilled! By knocking down the wall between this room and the smallest main floor bedroom, there was enough room to create a bigger bathroom AND a walk-in closet, making this an ideal master suite. 

After: Master Bedroom

Because who wouldn’t like to have a walk-in closet? 

Before: Bathroom

Before the renovation, the main floor bathroom didn’t have enough space, storage or style. 

After: Bathroom

Taking out the smallest bedroom in favor of increased space in the bathroom proved to be the right move for Scott, Amanda and Marty. Just look at all that counter space! And with the two sinks and a much larger mirror, the space is living up to its full potential. 

Before: Bathroom

The smallest bedroom on the main floor could really only be used for a nursery given its size. Knocking down the walls and using it to expand the bathroom's footprint seemed like the best option for the team. 

After: Bathroom

Amanda installed luxurious in-floor heating, taking this stellar main floor bathroom to the next level.

Before: Bedroom

The space is a great size and with plans in place to increase the size of the master bedroom, it was the perfect choice for a second bedroom. 

After: Bedroom

New built-in storage in this bedroom adds huge value. The more closet space, the better, especially from a buyer's perspective! 

Before: Basement

The unfinished basement didn’t exactly wow Scott when he first visited the space, and the moisture seeping through the walls proved to be a major obstacle during the renovation. Another complication? Scott and investor Marty found a crack in the foundation, which needed to be fixed before the team could move forward with cosmetic fixes. 

After: Basement

But this labor of love certainly paid off. There was enough room in the basement for a foosball table, living area and even an office space. 

After: Basement

The living area of the basement is a big-time upgrade; it’s the ideal spot for guests to play and relax. And while it might have taken Marty and Scott extra time to clear up the moisture problem, everything came together when it was all said and done.

Before: Basement Bedroom

This bonus room was a nice surprise for our team, and with the right purpose, the space could really shine.

After: Basement Bedroom

Missing that third bedroom from upstairs? Well, never fear! Scott, Amanda and Marty transformed the basement’s bonus room into a bedroom which would be perfect for a family or a rental space for additional income. Now, the big question: When can we move in?

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