Investor’s Basics Series: The extra fees and costs everyone forgets when buying a property
Whether you have decided to try getting an off the market property or not, now that you have found the property you want and closed on it, it is time to start seeing how you will proceed.
Here are some hidden fees and cost you need to take into account so you can do the math right and be ready for anything:
Closing costs
There are a lot of costs associated with the closing of the deal that you need to keep in mind. On average the closing costs can usually add up to 2% to 5% of the value of the property.
Some expenses may be inconsequential, but others like the home inspection and appraisal needed to close may add up to hundreds of dollars.
Property taxes
Most times, the property taxes you need to pay will be added to the mortgage premium each month, so it is easy to forget to factor them in, but it is important to know how much you will have to pay so that you have a good idea of how to plan your month to month finances.
It is also important to remember that, most times, the property taxes will rise each year. This means you need to think ahead into the future to make sure you can comfortably afford it each month.
Insurance
Like property taxes, the home insurance will more likely be paid each month with your mortgage payment, but you want to make sure you do your research and find the perfect insurance company to lower your monthly costs and get the best service possible, and you need to make sure you factor that in as well.
Renovations
Unless you buy a turnkey property, you may need to do some renovations, or at least give maintenance to some area of the property you bought. Don’t underestimate these costs! They may add up to a lot of money and could put you in financial strain.
Being smart and thorough with the math before closing on the property you want can help you avoid a lot of stress. If you feel like you need more guidance, remember you can always contact us to guide you through everything!
