The fallout from the COVID-19 pandemic has resulted in millions of people becoming financially crippled. Furthermore, the new normal has entirely changed everyone’s daily life, and managing one’s finances has become even more challenging than ever before.
Finding the time and energy to get it done for real estate in Balmain investors and homeowners who manage their finances can be challenging. Fortunately, there are ways to make it easier with the help of real estate agents. Here are a few of the most common real estate expenses that real estate agents should track.
Fixed costs
There are particular fixed real estate property expenses that you need to manage per month or year. Aside from property taxes, these include property insurance, water, sewer, and garbage collection. Even if the property’s previous owner doesn’t have the details of these expenses handy, your real estate agent can help you track the property tax record.
When computing real estate expenses using the best budget app, it’s best to understand the possible property taxes that you need to pay regularly after buying them because there’s a big chance that they’ll increase once the sale is completed. Your or your real estate agent can coordinate with the tax assessor to get the correct value.
Variable expenses
Variable expenses primarily consist of costs that may change each month or year. It’s often challenging to compute these expenses, but with the help of a highly experienced real estate agent, you’ll find it easier to get more accurate predictions each time you need it.
A few of the variable expenses include vacancy and capital expenditures. You also need to pay the real estate broker commission and the eviction and collection costs. Remember that monthly home loan payments can affect your revenue. So, even if you’re earning from your rental property, there’s a chance that it won’t be enough to cover your mortgage payments on your property.
Property management
Property managers primarily charge between 8% and 12% of the property rental’s monthly revenue. While it may appear like a lot of money, hiring ideal property management can be pretty beneficial to your investment.
A few people may not know it, but tenant screening and vacant property marketing are some of the most common rental property expenses that an owner has to cover. Aside from using a text budget app to help manage your marketing expenses, you can hire a real estate agent that can make your job a lot easier.
Real estate agents can help you find the right person who can handle all your needs. They can look for a professional who has the knowledge to handle several daily tasks, including rent collection and repair management. Lastly, they can also help ensure that you can focus on investing as they handle your bookkeeping and property management.
Leasing commissions
It’s hard to find a tenant who’s trustworthy and reliable to pay for their monthly rents. That’s why it’s essential to hire a real estate agent who will help you find a new tenant who can cover at least one month or one-half month of rent.
When it comes to finding a new tenant or if it’s time to renew the contract, a few property management companies typically collect a renewal fee that equates to one-half worth of a month’s rent. Meanwhile, others choose to lease their space without any charge at all.
Maintenance and repair
As the owner of the leasing property, you are responsible for ensuring that every part of the rental home or apartment is always in its top condition. So, you need to regularly perform a series of inspections to check if everything’s working as it should.
Hiring a real estate agent to check for landscaping and pest control costs is an effective way to know how much you need to budget for your expenses. Even more, they might also have a couple of contacts that can help you get some discounts on some of these services.
Homeowners insurance
Homeowners need to maintain their homeowner’s insurance policy even if they purchase the property outright. That’s because this document can cover the repair expenses for catastrophic events such as fires and other damage. You can pay this fee every month or do it every quarter.
However, do note that there are particular instances that basic homeowner insurance policies won’t cover, for example, floods. So, if you’re in a flood-prone location, it’s best to ask help from your insurance agent if you can get a separate flood insurance policy from your lender. You can also check the type of insurance that you need based on your local real estate market.
Closing costs
Another factor that you can consider is the closing costs. Remember that it’s not only the down payment you need to cover when applying for a mortgage. Other fees such as processing, appraisal costs, and title insurance are only a few of the expenses that you need to pay, too.
That’s why it’s highly advisable to get in touch with your real estate agent to know the fees you need to pay when buying a property. Generally, closing costs can range from 20% to 30% of the property’s total price, especially when you’re about to buy a low-priced home.
HOA dues
Depending on your location, there’s a chance that you might need to pay for homeowners association fees each month. For instance, your neighborhood might have shared community spaces such as pools and common areas. To maintain these amenities, you need to pay a particular amount each month to cover the expenses.
Those who live in condos and single-family houses are often familiar with these fees, which cover cable, building insurance, and yard maintenance, among other things. Asking help from a real estate agent can help you find out more about the HOA dues if your preferred property has one.
These are only a few of the things that your real estate agent can help you with, especially when it comes to homeownership. Managing all the paperwork for buying a house can be overwhelming. So, if you need help from the experts, don’t hesitate to find one.
