New homeowners often focus on the price of the property, but not the additional fees, stamp duties, and recurring charges. It’s a common mistake to think these “miscellaneous” costs don’t amount to much – in fact, they can sometimes be the deciding factor when it comes to real estate investment. Even for homeowners, it’s best to keep the following in mind, so you can budget appropriately.
Let me quickly illustrate what I mean.
Say you buy a $1 million condo, and sell it for $1.2 million after 5 years. While it would be common to say you’ve made $200k in profits, here’s what it could look like after you’ve accounted for other costs:
| Description |
Amount |
| Buying |
| BSD |
$24,600 |
| Legal Fees |
$2,750 |
| Reno |
$45,000 |
| Buying Costs |
$72,350 |
|
|
| Selling |
| Commissions |
$24,000 |
| Legal Fees |
$2,750 |
| Selling Costs |
$26,750 |
|
|
| Profit ($1.2M – $1.0M) |
$200,000 |
| Less: Interest over 5 years |
$44,604 |
| Less: buying cost |
$72,350 |
| Less: selling cost |
$26,750 |
| Net Profit |
$56,296 |
Note: All information here is relevant as of September 2021. We will update this article periodically, as stamp duties, policies, etc, change....
