Hidden costs of buying a house

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Hidden costs of buying a house

Justin Hanson
Member since 2023 · 9 posts · 4 votes

I am wondering if you tally up all costs that come with purchasing a home (turn key rental for this example) such as title and escrow, closing costs, property taxes, etc. What is the average total cost as a percentage of the homes sale value? My wife and I are Looking to buy our first investment property and want to get an idea of how much money we will need to get started. We plan on financing the home with conventional financing, 15% down. We live and are looking in Oregon

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Ryan Bakerian
Real Estate Agent · Albany, NY · Member since 2017 · 80 posts · 26 votes
3y
Quote from @Justin Hanson:

I am wondering if you tally up all costs that come with purchasing a home (turn key rental for this example) such as title and escrow, closing costs, property taxes, etc. What is the average total cost as a percentage of the homes sale value? My wife and I are Looking to buy our first investment property and want to get an idea of how much money we will need to get started. We plan on financing the home with conventional financing, 15% down. We live and are looking in Oregon

There's going to be a lot of variables here especially with property tax numbers and pre paids. I'd say 2-3% on average but again it's a hard question as it varies by state. I'd contact a lender in your area and they can get you a good faith estimate if you give them some numbers on a property. 
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  • Bruce WoodruffPro Member
    Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
    3y

    I just bought a house and it came to less than 2%. But that doesn't count any repairs or just plain moving in costs.

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  • Ryan Bakerian
    Real Estate Agent · Albany, NY · Member since 2017 · 80 posts · 26 votes
    3y
    Quote from @Justin Hanson:

    I am wondering if you tally up all costs that come with purchasing a home (turn key rental for this example) such as title and escrow, closing costs, property taxes, etc. What is the average total cost as a percentage of the homes sale value? My wife and I are Looking to buy our first investment property and want to get an idea of how much money we will need to get started. We plan on financing the home with conventional financing, 15% down. We live and are looking in Oregon

    There's going to be a lot of variables here especially with property tax numbers and pre paids. I'd say 2-3% on average but again it's a hard question as it varies by state. I'd contact a lender in your area and they can get you a good faith estimate if you give them some numbers on a property. 
    1Reply
  • Sarah WillisBusiness Member
    Real Estate Agent · Bend, OR · Member since 2023 · 20 posts · 6 votes
    3y

    Hey Justin,

    I work out of Central Oregon and we factor in 2% of purchase price into our client's deals analyses. It does vary lender to lender, what time of year and where you are purchasing (escrowed taxes and insurance specifically here), so I would plan on 3% to be conservative and plan on having a little buffer that's left over. 

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