We are ethical investors. We pay fair cash prices for properties depending on their location, and condition. This is a great convenience for sellers keen to sell their real estate urgently. They may be relocating to another town, or wanting access to their capital. Then we sell the property on later when the market comes to life. We wrote this post to explain how our real estate investments incur expenses that we have to recoup while in this transition.
Transaction Costs Attached to Real Estate Investments
Real estate sellers working through us benefit from not having to pay realtor commission. However, we still have to pay land transfer costs on our real estate investments upon closing. We also need to factor in adjustments for prepaid amounts such as heating oil, lawn care, utility bills, property taxes, or other routine services. Thus we pay more for a home than the seller receives despite there being no realtor involved.
Upkeep Costs Associated with Investing in Real Estate
We prefer to hold our real estate investments untenanted to ensure they are readily available for immediate resale. However routine property costs continue unabated. Depending on where we are in the cycle, we may be up for an annual property tax bill. We also have to keep paying utility costs, and of course heating oil to prevent pipes from freezing in a cold snap.
But unfortunately that’s not the end of the matter. The property and the building must the kept clean, and monitored for the possibility of insects moving in, and pipes leaking. Moreover the grass still grows and leaves still end up in the eaves troughs. These costs can add up to a significant amount of money, over time.
We know the Calgary real estate market well enough to be able to estimate how long these real estate investments are likely to remain on our hands. Then we deduct a realistic amount from the value of the property which is the basis for our bid.
How We Buy (And Sell) Real Estate in Confidence
Our real estate investments for resale are hence in good, move-in condition. That’s because we curate, and even improve them while our care. Speak to us soon if you need expert advice on the Calgary property market, and where the best deals are.