Real Estate Questions and Answers
By Steve Gillman - 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
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
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.