Purchasing an investment property is not always the same as purchasing residential, owner-occupied real estate and there are often different fees and costs involved.

For example, in Maryland, individuals who reside in their property qualify for semi-annual real property tax payments. Owners of investment property do not qualify for this payment schedule and must pay their real property taxes in a single payment. Certain tax credits that owner-occupied properties receive also are not extended to investors. Interest rates are often higher for investment properties and not all lenders will lend to investors.

IMPORTANT NOTICE TO INVESTORS REGARDING REAL PROPERTY TAXES

When reviewing real property tax bills of a potential investment property, make sure you understand what tax credits the current owners are receiving if the property is classified as owner-occupied. Those same credits will not be available to you if you plan on holding the property as investment property and the loss of these credits will cause your real property tax bill to be significantly higher than what the current owner is paying in real property taxes. This will increase your monthly carrying costs for the property.

Purchasers of properties at foreclosure sale must also be aware that these purchases carry additional risks and costs. What many buyers of foreclosure properties do not realize is that they must pay interest on their purchase until the date the foreclosure sale is ratified and they actually close on the purchase of the property. This could amount to thousands of dollars in interest. Furthermore, the current owners may still be residing in the property and the new owners have the responsibility of getting them out of the property, if that is their desire. Existing tenants may also have the right to remain in the property.

If you have any questions regarding the purchase of investment property, please call us today at (240) 631-6690.

Peninsula Settlements, LLC
We know real estate.