How much does it actually cost to buy a rental property?
Hello, I am a 20 year old that is planning on acquiring my first rental property sometime this year. At first I thought that saving up $5,000 would suffice, but after working at a real estate development company this summer as an intern I am worried that my target is too low.
To back up a step, my goal is to buy a one family home at around $50,000 that is close to move in ready that would generate a couple hundred dollars of cash flow a month. I thought that a 10% down payment would be enough, so I set my savings target at $5,000.
Now I am thinking that I should save up extra money for closing costs such as inspection, lawyer fees, and a title search. Also, minor renovations, possible vacancies, etc.
How many of these fees do I actually need to worry about and what are your recommendations for a good amount of money to save before I invest?
Thank you for your replies in advance!