The first thing that comes to mind when you start investing in real estate is the initial cost.How long will it take?In this article, we will provide an estimate of the initial cost and introduce a breakdown of the cost. * Just to be sure, I would like to inform you that the down payment required for borrowing a loan is excluded.
table of contents
Estimated initial cost of real estate investment
The initial cost varies depending on the property you purchase, but it is said that about 6 to 8% is required for second-hand properties. For a 1000 million yen property, the initial cost is 60 to 80 yen.Now let's take a look at the specifics.
Expenses related to real estate loans
In many cases, I think that I will use a real estate investment loan.Fees are charged in addition to the actual purchase amount.
1. Guarantee fee
In the case of real estate loans, the amount is large and the repayment period is long, so it is customary to use a guarantor company instead of an individual as a guarantor.
A guarantee fee is something like insurance for a bank that is paid to have a guarantee company take over when the borrower becomes unable to repay.After taking over, it will be the flow of paying the loan to the guarantee company.The market rate is 2% of the loan amount, and 0.2 to 0.3% is added if the interest rate on the loan is added.Because the risk of bad debt is taken into consideration, it will be higher than another cost related to the loan, the administration fee.The total amount may also vary depending on the creditworthiness of the borrower.You can also pay the guarantee fee in a lump sum, which is cheaper because there is no interest on the loan.
2. Administrative fee
It is a processing fee to be paid to the bank.There is a fixed rate system and a fixed rate system for the total borrowing amount.
In the case of the flat rate system, the market price is around 1 yen, and in the fixed rate system, the market price is 2 to XNUMX% of the borrowed amount.
real estate brokerage commission
It is paid to a real estate brokerage company, and the maximum amount is determined by the Building Lots and Buildings Transaction Business Act as follows.
Brokerage fee upper limit 200% + consumption tax for the part where the selling price is 5 million yen or less
If the transaction price exceeds 200 million yen and is 400 million yen or less, the upper limit of the brokerage fee is 4% + consumption tax
Brokerage fee upper limit 400% + consumption tax for the part where the sale price exceeds 3 million yen
When the sales contract is concluded, the sales price is determined and the amount is determined.Generally, 50% is paid when the sales contract is concluded, and the remaining 50% is paid when delivery is completed.
print fee
A revenue stamp is a document issued by the government for the collection of taxes, fees, etc.
Since the tax is paid at the time of purchase, revenue stamps are affixed as evidence that the tax has been paid.
Please note that it is necessary for both the real estate sales contract and the money loan contract (loan contract).
- If the stated amount is 100 million yen to 500 million yen, the real estate sales contract is 500 yen, and the monetary consumption lease contract is 1000 yen.
- If the stated amount is 500 million yen to 1,000 million yen, the real estate sales contract is 5,000 yen, and the monetary consumption lease contract is 10,000 yen.
- If the stated amount is 1,000 million yen to 5,000 million yen, the real estate sales contract is 10,000 yen, and the monetary consumption lease contract is 20,000 yen.
- If the stated amount is 5,000 million yen to 1 million yen, the real estate sales contract is 30,000 yen, and the monetary consumption lease contract is 60,000 yen.
- If the stated amount is 1 million yen to 5 million yen, the real estate sales contract is 60,000 yen, and the monetary consumption lease contract is 100,000 yen.
* As of 2018 month
Judicial scrivener reward
In addition to the registration and license tax to be paid to the country, the registration fee to be paid to the legal affairs bureau, the fee to be paid to the judicial scrivener, the transaction fee, and the mortgage setting registration, which is the registration when borrowing a loan, etc.
Fire insurance premiums
It should be included in case the collateral for the loan is damaged by a natural disaster such as an earthquake or typhoon.
If the property is damaged and rental income is lost, the loan repayment will be delayed and there is a possibility that it will be impossible to repay.In the case of ordinary households, relief is available through financial support under the Act on Support for Reconstructing Livelihoods of Disaster Victims, but in the case of rental property owners, there is no financial support, so they must rebuild on their own.Therefore, please consider that fire insurance should always be included.
In addition, insurance premiums for wooden buildings tend to be three times higher than those for reinforced concrete buildings.Standards for calculating insurance premiums are generally evaluated based on the cost of restructuring.
Other taxes
1. Registration and license tax
When purchasing real estate, it is necessary to register the ownership in order to record and publicize the ownership of the land and buildings in the register at the Legal Affairs Bureau (registry office).At that time, the tax governed by the country is the registration and license tax.It is calculated by multiplying the fixed asset tax assessment value of the real estate by the tax rate, which is 2% of the real estate price in the case of purchase.The real estate price is not the purchase price but the assessed value used for tax calculation such as property tax.In addition, in the case of a loan, registration of mortgage is required, and 0.4% will be charged as a registration and license tax.You can do it yourself, but it is more convenient to use a judicial scrivener than to study specialized knowledge in your busy time.
2.Real estate acquisition tax
The cost of acquiring real estate is 4% of the assessed value of property tax.You will receive a tax payment notification within three to six months after purchase.
3. Property Tax/City Planning Tax
This tax is levied on those who are registered in the Fixed Assets Register as of January XNUMX of each year.
As for the collection method, tax payment notices for four periods will be sent from the municipality to taxpayers, so they will be paid through government offices, branch offices, Japan Post Bank, financial institutions, and convenience stores within the payment deadline.
The property tax calculation method is the real estate value (fixed property tax assessed value) x 1.4% (the tax rate may vary depending on the municipality).As a general rule, the property tax assessment value is reassessed once every three years, and is calculated at approximately 3% of the published price.
The city planning tax is a tax that is collected along with the property tax for the purpose of allocating the expenses necessary for city planning projects and land readjustment projects.The calculation method is the tax base (fixed asset tax assessed value) x 0.3% (limited tax rate) (the tax rate may vary depending on the municipality).
Summary
What are the initial costs of real estate investment?
- Guarantee fees and administration fees for real estate loans
- Real estate brokerage fee paid to a real estate brokerage company
- Stamp fee for real estate sales contract and money loan contract
- Payment to judicial scrivener such as registration fee, commission, attendance fee, mortgage setting registration fee, etc.
- Fire insurance premiums
- Other taxes (registration and license tax, real estate acquisition tax, property tax, city planning tax)
At Rich Road Co., Ltd., we will consistently support all aspects of investment real estate, from complete beginners to experienced people, from a wide range of real estate selection, loan consultations, post-purchase management, and renovations.
