Hello there. I am a real estate investor and am aware of the different costs involved in a real estate transaction. Thus, I could tell you what are the costs to invest in real estate. Let me talk about two types of costs, essential initial and recurring costs related to real estate investment. I am sharing everything you need to know below.
Costs Covered Under Real Estate Investment
Here are the costs which come under real estate investment:
Needed Initial Costs
Buying Price: This is the most apparent and important cost for making a real estate investment. This is the cost agreed upon by the seller.
Registration and Stamp Duty Fees: Stamp duty is a tax on property transactions imposed by the government. It is calculated as a percentage of the value of your property. The range is between 3 percent to 8 percent.
Home Loan and Related Fees: You are charged processing fees by banks on taking a home loan to cover the administrative cost. This administrative cost is for the loan approval and processing.
Legal and Brokerage Fees: If you’ve bought a resale flat via brokers, they charge a commission based on a percentage of the property value. Legal fees include sale agreement drafting, property due diligence, etc.
Recurring Costs
Maintenance Deposits: A onetime maintenance deposit for the upkeep of common areas in a housing society.
Taxes: Property tax is paid to local municipalities. GST is applicable for under construction properties, with a range of 5 to 12 percent of the construction cost.
Insurance Premiums: On taking property insurance, you pay premiums yearly
Property Management Fees: If you give out your house on rent and hire a property management company for the upkeep of the house, they too charge between 8 to 12 percent of the rental income.
This is all. I hope you now know what are the costs to invest in real estate.
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What are the Costs to Invest in Real Estate?
raj
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11 months
2024-12-16T10:33:26+00:00 2024-12-16T14:35:34+00:00Comment
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