Real Estate Capvert

Investment Advice, Consultation … All You Need.

Real Estate Capvert - Investment Advice, Consultation … All You Need.

What Are The Rental Property Fees Most Landlords Pay?

Real Estate Capvert banner 1Rental property fees are the necessary evils that come with owning property that you allow other people to pay to use. One way to make your money work for you is to buy homes, businesses, and properties, which other people will be willing to pay you to use. With these properties come property management fees.

The most common property management fees that landlords have to pay are the land taxes. Most people who own property must pay taxes on that property. Local, state, and federal taxes may apply to the properties that you own.

Maintaining their holdings also enter into the property management fees that land owners have to pay. Maintenance issues with houses, and structures occur regularly. If you rent your houses out to other people those people expect you to keep the structures in the best possible condition. Landlords are constantly scheduling people to do checks on air conditioning and heating systems. The landlords have to pay a lot of attention to the plumbing and electrical wiring in the structures they rent to other people. The best way to take care of the maintenance issues is for the landlord to schedule regular maintenance by professionals.

The Best Real Estate Books For Rental Property Investment

There are lots of lists of best real estate books or rental property investment books. If you do a web search you often find a guru interested in selling you an expensive real course. If you search for ways to invest in rental property you often find yourself on a “squeeze page” where you feel compelled to “buy now” or you will “lose out” on millions of dollars in real estate riches.

Unfortunately, these types of sales pages do not really give you a full picture of what you are buying and often mislead people into paying a very high price for something that they don’t need. You don’t need to spend thousands of dollars to become an expert in rental property investing. Buying real estate books is a much more cost effective way of increasing your knowledge.Real Estate Capvert banner 2

Investing in rental property takes a lot of different areas of expertise. You need to become good at budgeting, negotiating, marketing, loans, contracting and home improvements, legal issues, rental property management, etc.

So, where do you start? I have a few recommendations to help you find the best real estate books:

Buy any book by John T. Reed. Reed has written a library of books on real estate investing. He covers just about every topic in real estate that you can imagine. His books on buying 20% below market value are excellent. You can find some used Reed books at Amazon but he only sells through his own website. His books are all reasonably priced and you won’t go wrong buying any of them. Reed pulls no punches when discussing the pro’s and con’s of real estate investing. He also has some choice reviews of so-called “guru’s”.
“Real Estate Loop-Holes” by Diane Kennedy is an excellent short book about some the tax aspects you should be aware of when investing in rental property. You can learn about 1031 property exchanges so that you can sell your property without paying capital gains taxes.
“Means Residential Repair and Remodeling Costs” is the bible of home repair estimating. Before you buy any rental property, you really need to know how much it will cost to update the property. Probably the biggest mistake new investors make when starting rental property investment is to under-estimate the costs to fix the property up.

How Do Rent-To-Buy Real Estate Transactions Work?

Traditionally, prospect home buyers obtain a mortgage loan via a bank to purchase their dream house. However, this is often not possible due to reasons such as bad credit, insufficient savings, employment instability and insufficient income. In such a situation, you need to consider all possible alternatives. One of them is a rent-to-buy property deal. Find out how this option works to decide whether it will be suitable for you.

Basics

The rent-to-buy property agreement gives you the opportunity to rent a house with the option for purchasing it. You will pay a rental rate just like for a regular rental property. At the end of the rental period, you will have the option of purchasing the property. The purchase price is set initially by the seller and the buyer and cannot be changed. Typically, there is a deposit, which is paid initially and which goes towards the purchase price. In most cases, a chunk of the monthly payments goes towards it as well.

Term

Real Estate Capvert banner 3The term of the agreement is chosen by the buyer and the seller. It can be from one to five years, but in most cases it is between three and five years. Just like all other features of the deal, the term is subject to negotiation. After the term expires, the buyer has the right and the obligation to purchase the property.

Deposit and Rental Rate

Upon the signing of the rent-to-buy agreement, the prospect buyer places a deposit. This deposit can be a fixed sum determined by the seller or calculated as a percentage of the value of the property. In any case, it is typically around five times smaller compared to the deposit which you have to place when purchasing a house with the use of a mortgage loan. This deposit is discounted from the sales price at the time of purchase of the property.

The rental rate, which can be paid monthly or fortnightly, consists of two parts – the rent and the chunk which goes towards the sales price. The latter chunk is smaller, but it is very important. It helps you to built equity in the property so that when the time for purchase comes, you can place a smaller deposit or no deposit at all.

Outcomes

If all goes well, when the time for purchase comes, you will be able to take out a home loan to finance it. If the property’s value has increased, this will work in your favour as you will have to pay a fixed price. If you have difficulties with paying the rental rate, you can readily renegotiate it with the seller. If you decide to move or you cannot afford to keep the property, you will be free to leave.