Buying Investment PropertyLegal Matters & TaxesInvestment Property Costs to Consider This 2018 by Jenna Ramadan May 7, 2018January 27, 2019 by Jenna Ramadan May 7, 2018January 27, 2019The Search for a Rental PropertyYou may have just started your path on becoming a real estate investor. You may instead be an experienced real estate investor working on how to make money in real estate. Either way, you have an important task in front of you. You are on the search for an investment property for sale. So, you are here to get a glimpse of what kind of investment property costs you should be looking out for on your journey.Fortunately, Mashvisor has been founded specifically to help you on your investment property search. We work to provide real estate investors like you with the analytics they need to prosper in real estate investing. Mashvisor gives you a number of tools to use. One of these is the real estate investment property calculator, which comes quite in handy when you’re on the hunt for an investment property. Get an idea of what rental income you can expect with your investment property analysis, where sure it will be useful. Without further ado, here are important investment property costs to consider this 2018. Important Investment Property CostsInvestment Property Costs – The DetailsPurchase PriceWhen you decide on becoming a real estate investor, you know that buying an investment property is the first and most obvious expense you can expect. How much of an expense the rental property will be goes back to how you decide to pay for it. Rental properties can be considered one of the best income generating investments, but you need to keep in mind the 10% minimum down payment most investment properties require. Not to mention the mortgage insurance you may have to pay. This may happen if you end up borrowing more than 80% of the property value. We’ll talk more about this further down the blog. Building InspectionThis may be simple, but it is an important investment property task and cost to keep in mind. This cost is actually one to appreciate because it can save you even more expensive, costly charges. Getting your investment property inspected can help you cover any damages before they worsen. This property report can even save you from buying a “far from fixing point” investment property due to the expected costs being way more than what it’s worth. Establishment FeesWe know you’re going to have a number of investment property finance options, one of them being going to financial institutions for loans. Some of these institutions can charge an establishment fee for the set up of your loan. If this is the case, consult them to determine just how much you’re going to be charged. Property Valuation FeesSince formal valuations can only be conducted by a qualified valuer, you’re going to need to pay for their services. It takes a good amount of education and training in this field so they get your valuation right, so it is only right. On a national average, a property valuation usually costs $330 dollars. Related: The 6 Hidden Costs of Owning Rental PropertyLegal FeesSince legal transfer of ownership is usually conducted by a conveyancer or solicitor, they are going to need to be paid. This can cost anywhere between $600-$800. When buying an investment property from another real estate investor, this is a fee you can’t ignore.Mortgage Payments The main mortgage expense we want to stress here is the mortgage payments. The rental income you receive should cover most of those monthly mortgage fees, but it might be that you will have to put in a contribution. Investment property strategies can help you come up with plans to avoid falling behind on those payments or coming up short. Chances are you will have to add interest costs as well and the potential of a rate rise. Mortgages on investment properties are almost inevitable, so don’t neglect their importance. Related: Buying an Investment Property: Cash or Mortgage?Property ManagementYou’re a busy person. You are always thinking of new ways to make money in real estate and on the hunt for new rental property investment opportunities. Time may be limited, so you may consider hiring a rental property manager. There is absolutely no problem with that, but everything has a price. A professional real estate property manager can charge anywhere between 6% to 8% of the rental income that’s coming in. Managers often charge a fee whenever tenants move out and the search for new good tenants to replace them is on. This fee is anywhere around 110% to 150% of one week’s rent. You will get your money’s worth as they will take care of your baby building. Still, it is a cost to consider. Related: Professional Property Management: Yes or No? Why or Why Not?Maintenance, Repairs, RenovationsBroken water heaters, fresh paint jobs, leaky taps, roof leaks, the list of what needs to be repaired and maintained in an investment property goes on and on. Now unless you’re a real estate investor, painter, plumber, fixer, etc., you’re going to need to hire someone to do the job for you.This is an expense, but maintaining the functionality of your investment property is what keeps it running! Some of these repairs can be claimed, so double check if they are considered tax deductible. The best real estate investors put aside a percentage of the rental income, something like 5%, or a figure each year for maintenance. Although some repairs are unpredictable, you can plan for the worst and play fortune teller. InsuranceOwning an investment property is like being a parent to a child. One of the first things you set up for a child is health insurance. Your child’s health is a priority, and insuring them medical attention is the least you could do for them. Well, your investment property is your child, and its health is a priority too. Insurance will cover your rental property for things like flood damage, fires, or even malicious damage from tenants. The last thing you want is a tenant who lacks the funds to pay rent; this is where insurance comes in handy. Of course, each insurer differs from the other, so clear up what they do or do not cover as well as how much it will cost you. Council RatesRates will differ for from one real estate investor to the next, as it all goes back to what council you are a part of. In order to own an investment property, you are subject to paying these council rates, so the council keeps it running. Expect to pay these every quarter. Land TaxThis annual tax cost is levied on the owner of the land. This cost can be exempted in certain areas, but as a rental property investor, you will be liable. Strata Fees (Body Corporate)Strata fees exist when you own housing units like a townhouse in a complex. They help in paying for the maintenance of common areas, so the charge will depend on what the facility is itself. Things like pools, gyms and their equipment, saunas, and such will need high maintenance. These are attractive features to tenants, but they come at a price. This can easily be balanced out if you properly price the rent of the rental unit. Investment Property Costs MatterReal estate investment risks are part of the investment property business. There are a million things that can cost you. However, the most successful real estate investors can agree that there is always an expense keeping your investment property going. It is said that you have to spend money to make money. It is your job, with the help of Mashvisor, to maintain those pockets full. The money you pay to invest has a huge effect on what you have left in those pockets, so manage cautiously. It’s no secret that every investment has a cost, so be aware of the. These are just a small number of the different costs that can occur on your investment property. Those costs may differ, but they have one thing in common: it goes somewhere else, not to you. Not to you directly, but instead to what you invested in. These costs can be beneficial, but don’t let them eat away at your wallet freely. To start your 14-day free trial with Mashvisor and subscribe to our services with a 20% discount after, click here. Start Your Investment Property Search! START FREE TRIAL 0FacebookTwitterGoogle +PinterestLinkedin Jenna RamadanJenna is Content Writer at Mashvisor with a passion for creative writing. She enjoys covering all aspects of the real estate investment business. Previous Post What’s the Difference Between a Real Estate Developer and a Real Estate Investor? 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