Foreclosures and REO’s are bringing many investors out of the woodwork - and some of the new investors who are novices are making many mistakes in selecting and purchasing of undervalued residential real estate.

RealtyTimes published an article that discusses a situation where a novice investor purchased a property and outsourced property management to a property manager. The property had lots of defects and improving the property to get it ready for rental proved expensive for this investor. The investor was blaming the property manager for the expenses.

Before becoming a Do-It-Yourself or absentee landlord, the 3 tips that investors should follow for success are:

1. Understand the market you are purchasing your investment property.

2. Be clear of your end goal and write it down

3. Calculate the costs of owning the investment property

These key rules will help you make good decisions when you are purchasing investment property.