Understanding what an income property costs on both a yearly and monthly basis are important considerations for the real estate investor. In addition, knowing the operating cost of each unit is important, as it helps determine the bare minimum rental rate. No one ever said owning income property was cheap! There are many expenses that need to be taken into account, such as:
- Mortgage payments
- Taxes
- Utilities (if included)
- Maintenance and repairs
- Management
- Insurance
- Legal and professional fees
Continue reading ‘What Do Your Rentals Cost You?’
(This post is part of our “Landlord Basics” series, which seeks to help the new landlord / investor understand some of the basics of tenant relations and property management. Click here to view the entire Landlord Basics archive.)
From time to time as you purchase buildings, you may inherit tenants that come along with them. If a tenant is paying their rent on time every month and taking care of the property, this is a very good thing. However, if a tenant is not taking care of a property, it can cause issues down the line when that tenant moves out. Some of these tenants will pay rent on time every month, and never call with concerns. Others will make themselves more evident by either not paying rent, calling constantly, or both.
Continue reading ‘Landlord Basics: Should You Keep A Bad Tenant?’
Having a tenants gas, electric, or water service get disconnected is a serious situation that must be addressed by a landlord quickly, but fairly. A tenant that has let a utility bill lapse to the point of disconnect is probably experiencing a severe financial hardship. If they have not let their rent lapse yet, chances are that is going to be happening sooner than you would think.
Continue reading ‘Dealing With Tenant Utility Disconnect Notices’
Part of buying and selling real estate are the fees that add up as a transaction comes to a close. Overlooking closing fees can be very damaging to the bottom line of a project for an investor, and not being aware of closing costs in a residential transaction could leave a home owner wondering where the profit from their sale went!
When selling in Western New York, plan ahead for the following expenses:
- First and foremost, all taxes, water bills, liens (such as mortgages), need to be taken care of. Generally a mortgage will be satisfied as part of the proceeds of the sale.
- Real estate commissions
- Attorney’s fees on average are currently $500-$600.
- Transfer Taxes – In Erie County, this is $9 for every $1000 of the sale (broken down into $4 for NY and $5 for Erie county). For example, on a $130,000 sale, there would be a transfer fee of $1,170.
- Title Search costs of $400 to $500 if you have your original abstract. It could cost significantly more without!
- Survey costs of $350 to $400 for an average city or suburban parcel with a copy of the survey from when you purchased your home.
- And generally another $500 in miscellaneous expenses that pop up along the way.
This list is not all inclusive, and the figures may vary depending on who you use to complete various aspects of the transaction, but the core principal remains the same: Plan ahead for closing costs!
(Thank you to contributing editor and real estate broker Ken Nagel for his assistance on this article.)
