When someone decides to invest in real estate, it’s a significant step that can also act as a passive wealth builder. However, if you’re investing in real estate for the first time, there are costs associated that you should be aware of. Here are some of the main ones that you should consider.
If your investment property is vacant for a period of time, the cost is going to be twofold. The first is the income missed from a tenant and the second coming from the costs of a mortgage payment. This money is going to come out of your pocket so it’s important that you stress finding a reliable tenant to fill your room.
Unexpected repairs are something that you’re going to see quite often. Whether it’s an electrical fault or a problem with the plumbing connection, it’s also going to come out of your pocket. By having a home inspection on the property beforehand, you’ll be able to scope out all of the potential issues and fix them before they get out of hand and cost you more.
If you cannot physically be at your investment property, you have the option of hiring a property manager. Their duty is to oversee your property and portray themselves as an acting landlord. Be prepared to spend about 7 – 10% of your monthly rent when going this route.
While investing in real estate can be frustrating and taxing at times, it is also a great avenue to build your wealth. If you haven’t started looking into real estate investing, you should consider the potential opportunities that come with it.