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Real Estate Questions and Answers

By - 2009

I get real estate questions in my email from subscribers to both my real estate investing course and the free version of my ebook on finding cheap homes. Here are a few of them on several different topics, along with my replies.

Q: How much does a property management company cost? I am not sure what criteria are important.

A: It depends on the type of property and the number of properties. I have heard of charges ranging from as little as 5% of gross rents collected to as much as 13%. Ask several companies what they charge and what is included in their service to get an idea of rates in your area. I have questions to ask on the page, Rental Property Management - Ten Questions To Ask.

Q: In today's market (late 2009) is it worthwhile to buy these "cheaper homes" (affordable but cute) and to re-sell them?

A: I don't really have a good answer for you. Prices seem to be dropping still and things are selling slowly. On the other hand, if you fix something up for a profit and sell quickly before prices go down more, it might still work. All in all, I think there will be better times to buy and sell homes in a year or two, but it is difficult to predict. Sorry I couldn't be more helpful, but these are unpredictable times.

Q: How much should my earnest money deposit be?

A: Real estate agents will tell you that you should include more earnest money with an offer, but if you can make it $100 (or even $10), they still have to present the offer. If you want the sellers to take you more seriously, you can add as part of the earnest money clause of the contract, "To be increased to $2,000 (or whatever) once the required inspections are done."

Q: How do I get started in real estate investing?

A: If you have never invested in real estate, I recommend getting educated. To do that on a budget, go to one of the large bookstores like Borders, where they will allow you to read for hours. They'll have many books on real estate investing of every type. I also think saving up a little money always helps. Even if you buy with nothing down you need some money for all the little expenses.

Q: Is it actually legal to get referral fees from real estate agents for sending customers to them?

A: When I used to sell real estate in Michigan many years ago, referral fees were legal. I believe they still are in many states, but I'm not sure which ones. I am sure that the National Association of Realtors will lobby to eventually make it illegal everywhere if they can, just as almost all "professional" organizations try to use law to gain a competitive advantage and control.

I'll have more of my replies to subscribers real estate questions on future pages. Watch for them in the "newest pages" section of the homepage.

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Houses Under Fifty Thousand | Real Estate Questions and Answers