When you choose to remodel your home, it’s crucial that you hire the right contractor for the job. You can get referrals from friends, family, or your Berkshire Hathaway HomeServices network professional. But there are other ways to get information so you can make the right choice.

It’s a good idea to interview at least three contractors, including your referrals. Depending on your state’s licensing rules, you should know the rules and regulations for licensing professionals. The purpose of licensing is to ensure that “the contractor meets the city's, town's, or state's requirements for working on residential and commercial construction projects.” Not all states require contractors to be licensed, and some focus only on specialties such as plumbing, electrical and HVAC, which makes it harder to ascertain a contractor’s expertise.

Angi.com offers a convenient state-by-state list of contractor license requirements and a license check tool with “links to the regulatory agencies’ real-time license verification websites” so you can confirm the contractor’s status before you hire. Some states also provide certifications that show the contractor has completed educational and work requirements for their specialties. Some regulators require contractors to carry general contractor insurance, provide references, financial statements, and proof of registration.

Ask for references and to see a portfolio of completed jobs. The contractor should agree to provide a written, detailed contract outlining the work to be done, the costs for each step, quality of materials to be used, completion dates, payment and inspection schedules, warranties, and means of communicating.

Your return on investment (ROI) is how much money you make or lose on a property investment. It should be enough to cover expenses and have positive cash flow. ROI can vary greatly, depending on the formulas you use.

The 2% rule. This rule states that the monthly rent for a rental property should be at least 2% of its purchase price. If you paid $300,000 for your home, you should be able to rent it for $6,000, as $300,000 X 0.02 = $6,000. This figure may be unrealistic in most markets.

The 1% rule. Let’s say that monthly rents for single family homes like yours are closer to $3,000. That’s only a 1% return on your $300,000 home. Is it worth it? Yes. If you combine the costs of your first mortgage and equity loan at $240,000, and the projected monthly rent of $3,000, you’ll net $600 a month in addition to the renter paying your mortgages. $240,000 X 0.01 = $2,400. $3,000 - $2,400 = $600. $600 X 12 = $7,200.

ROI for rental properties is determined by subtracting the total operating costs from the total rental income for the year and dividing this number by the mortgage amount. Operating expenses don’t include mortgage costs, but it does include repairs, maintenance, taxes, utilities, vacancy losses, management fees, etc. $3,000 X 12 = $36,000. Monthly operating costs are $800 X 12 = $9,600. $36,000 - $9,600 = $26,400. $26,400 / $240,000 = 0.11 ROI.

ROI should increase the longer you own the property.

One truism about the housing market is that it changes constantly to favor sellers or homebuyers. Seldom does a balanced market exist where buyers and sellers are more evenly matched except for summertime, when schools are out. That’s why it’s the busiest of homebuying seasons.

To be a better prepared buyer, you should get prequalified for a mortgage loan, and if costs are too high, you should lower your debts and pump up your savings for a down payment until you’re ready to buy.

If you’re looking to sell, you should get your homes in top condition so you can command the highest price possible. But the most important step is to build a strong relationship with your Berkshire Hathaway HomeServices network professional.

Your broker or agent can help you, whether you’re a buyer or seller. With a vast amount of data at their fingertips, they can keep you abreast of any changes in your local market. This spring, for example, the share of homes with price reductions was the highest since January 2017 and mortgage interest rates dropped slightly, which enticed sidelined buyers back into the market.

Freddie Mac predicts that interest rates won’t drop by much before June 2024, so homebuyers and sellers should be aware of the importance of having good credit. As banks tighten lending standards for unsecured loans like credit cards, they’ll favor purchase mortgages for borrowers and home improvement loans for sellers who’ve protected their credit without high balances, late payments or defaults. Mortgages are also secured by the borrower’s home.

Condominiums and co-ops are great choices for first-time homebuyers, singles, couples and roommates, and down-sizing families, but they are very different types of property ownership.

Condominiums are usually located in the most in-demand areas, near plentiful jobs and entertainment districts. You’ll own your unit and share amenities with other owners such as garage parking, fitness rooms, and swimming pools. You’ll pay a monthly, quarterly, or annual homeowners association (HOA) fee which is levied to take care of common areas. HOA fees vary widely, depending on amenities and the market.

As an investment, a condo owner is free to rent out their unit, but some HOAs impose limits on the number of units within the community that can be rented out or restrictions that prevent short-term rentals or the use of some amenities, because a high number of renters raises the HOA’s exposure to risk.

Co-op owners have a percentage ownership of their building and property, based on the size of their units, but they don’t own their individual units. You’re more likely to run into co-ops for sale in the Northeast, particularly New York City, where co-ops are operated like a corporation in which homeowners are shareholders. They have the right to approve new owner-occupants based on financial requirements and they can reject applicants they don’t like or trust. They can’t discriminate against protected classes, such as race, creed, age or gender. Most co-ops don’t allow renters; if they do, they impose restrictions such as rental terms and credit worthiness.