Just like an annual physical keeps you healthy, an annual real estate checkup helps maintain your financial well-being. December is the perfect time to review your situation and make any adjustments for the year ahead.
If you don’t yet own a home or investment property, your checkup is simple: Do I own real estate? If not, it’s time to start! The earlier you invest in real estate, the greater its potential to generate retirement income. Now is an ideal time to meet with a Realtor® and create a plan for your first purchase.
If you already own a home or investment properties, your annual checkup involves reviewing key areas to ensure your real estate continues to support your financial goals.
Get a market analysis from your Realtor
One of the great things about real estate in our area is its long-term appreciation. While the market has had its ups and downs, homes have appreciated significantly over the decades. For example, when I started in 1978, Baseline Subdivision homes in Boulder sold for under $30,000; today, in 2025, they start around $750,000. As a homeowner, it’s smart to update your home’s value each year and include it in your financial statement. This information helps you plan and evaluate your financial future, whether for real estate or other investments.
Review your real estate insurance
Along with tracking your property’s value, it’s important to review your insurance coverage to ensure it aligns with current replacement costs – especially given rising building costs since the Marshall Fire. Consider additional protections, such as flood insurance or coverage for sump pump failures, to stay prepared for unexpected events like the 2013 floods.
Check the loan balance on your home and/or your rental properties
If your home has an amortized loan, the balance decreases each month. On a 30-year loan, principal reduction is slow during the early years, but around year 14 it accelerates significantly. Over time, it’s rewarding to watch your equity grow year by year. Be sure to include the current loan balance on your financial statement for an accurate picture of your net worth.
Mortgage insurance removal
For this discussion, mortgage insurance refers to the type that protects your lender by covering the loan if you default. There’s also another type of mortgage insurance, similar to life insurance, which pays off the loan if you pass away, ensuring your loved ones are not left with the burden of mortgage payments.
Knowing your loan balance is key to determining if you can eliminate mortgage insurance. Many homes were purchased with low down payments, leading to Private Mortgage Insurance (PMI) being included in monthly payments. With rising property values and principal reduction, you might now qualify to remove PMI and lower your payment. Contact your lender to see if the insurance can be removed or if refinancing is necessary. Even if it’s not possible right now, you can create a plan to work toward removing it in the near future.
Check your interest rate
Over time, it’s easy to forget the interest rate on your mortgage. Rates were higher in 2024 but have dropped somewhat in 2025, making now a good time to check in with your lender. If your 30-year loan is five years old, refinancing typically resets the amortization schedule, but ask your lender about a recast to keep the remaining term. Refinancing at a lower rate and starting a new 30-year schedule can significantly reduce your monthly payment, and eliminating mortgage insurance could make your new payment even more attractive.
Decide on your loan term, if you refinance
If the idea of starting over on a 30-year loan doesn’t appeal to you, refinancing into a 15-year loan is another option. This can help you achieve faster principal reduction, though the payments will be higher, potentially making it harder to qualify. Some lenders may allow you to recast your loan with a new interest rate and a term that suits you. For example, if you’re 10 years into a 30-year loan, a lender could create a new loan at today’s rates, but with a 20-year amortization. This way, you could benefit from a lower interest rate and not extend your loan term by another 10 years.
Meet with your real estate lending professional and Realtor
Knowing the current value and loan balances of your real estate provides valuable insight when meeting with your lending professional and Realtor. With this information, you’ll understand how much equity you have, and if you have equity, you’ll have the opportunity to expand and grow your real estate portfolio.
If your family has grown, you may need a larger home. It’s possible to acquire that larger home while simultaneously building your real estate portfolio. You could explore refinancing your current home, renting it out, and pulling cash out for a down payment on your next personal residence.
If you’re happy with your current home, refinancing to pull cash out for a rental property could be an option. By consulting with your lending professional, you can assess whether you qualify now or create a plan to qualify in the future.
Get a home inspection
A home and a rental property can be among the largest investments a person or family makes in their lifetime. Like anything important to you, it’s essential to take good care of it. Scheduling a home inspection every so often is a smart idea, especially in the spring, when snow may have been hiding potential issues. When was the last time you checked your attic? You might find an unexpected family of raccoons! The value of a home inspector is that they can alert you to simple repairs and maintenance tasks before they become major problems. This helps you keep your property in good shape and plan for big-ticket items, like a roof or furnace, by budgeting accordingly.
Check into a home warranty
An independent Home Warranty Policy is often included in real estate transactions. These policies cover various components of the home, such as the furnace, air conditioner, water heater, and more. Some companies offer coverage for homes you already own and live in. If the potential failure of a water heater or furnace could cause financial strain, it might be wise to explore the policy’s premiums, coverage and deductibles.
Start your real estate checkup today by reaching out to your Realtor, lending professional and home inspector.
Duane graduated from the University of Colorado with a business degree and a major in real estate in 1978. He has been a Realtor® in Boulder since that time. He joined RE/MAX of Boulder in 1982 and has facilitated over 3,000 transactions over his career. Duane has been awarded Realtor® Emeritus by the National Association of Realtors and the Circle of Legends by RE/MAX LLC. Duane is also the author of two books, Realtor for Life and The Velocity of Wealth. You can reach out to Duane at DuaneDuggan@boulderco.com.
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