Making a real estate investment in St. Augustine, Florida, is a huge step. It requires a ton of research, touring potential properties, and playing with numbers to ensure you’re getting the most out of your investment.
However, many investors, especially if it’s their first time, decide to finance their rental property. Most of them don’t have a lump of cash lying around. With the help of banks and mortgage lenders, investors don’t need a pile of money to start or grow their portfolios.

When it comes to financing a rental property, there are some fees you should account for when calculating your investment. It’s also important to be aware of recurring fees after your purchase your rental property.
By the end of this article, you’ll know exactly what fees to expect when financing a rental property in St. Augustine.
Financing Fees Before Purchasing
Nothing is free in the world of real estate – nothing. So, you can expect that there are many more expenses to pay than just the price of the property you’re purchasing.
Below, we’ve listed five of the most surprising and costly fees you’ll have to pay when buying a rental property.
Down Payment
This one might be obvious, but do you know exactly how much you’ll have to put down as a down payment on an investment property?
If you’ve purchased the home you live in, you’re probably familiar with the different types of mortgages and loans that are available. With each loan comes different amount options for the down payment.
However, when you’re purchasing an investment property, lenders are less flexible about how much you can put down. On average, and depending on the loan, investors can expect to put down anywhere from 20% to 30% for a down payment.
Loan Establishment Fee
Remember when we mentioned nothing in real estate is free? When you first apply for a mortgage or loan, you’ll be charged a loan establishment or application fee by the lender.
Basically, this is a valuation and processing fee. You’re paying the officers to examine your financial status, credit scores, and so on to generate a loan offer.
On average, this can cost $250 and is paid at the beginning of the investment property purchase.
Mortgage Insurance
If you are able to find a mortgage lender that will allow you to make a down payment of less than 20%, then you’ll also be responsible for paying mortgage insurance each month.
This mortgage insurance will be tacked on to your monthly mortgage payment. You will eventually stop paying it when the equity you own in the rental property is 20%.
Sometimes it’s simply better to make the full down payment if possible and avoid this extra fee when financing a rental property.
Transfer Tax
Each state, and even certain cities, have set their own tax, which they charge when the title and deed of a property is transferred from one party to another.
In Florida, the tax rate is $0.70 per $100 of the property. Usually, the buyer and seller of the property split this transfer tax evenly. However, it may be different depending on the terms you both agree upon.
This transfer tax is to be paid at the closing of the property.
Conveyance Fees
When purchasing a property and transferring the title, there needs to be an investigation of the history of the property’s ownership. This is done through a conveyer who traces the title back and makes sure there are no liens or issues with transferring the title to another party.
Of course, this is an extra fee that must be paid when financing a rental. Costs vary depending on the sale price of the property and how many properties are being purchased at the time.
All in all, these fees are for legal professionals and resources to check on the transaction of the property.

Saving on Fees While Purchasing a Rental Property
There are ways you can save on these fees when financing a rental property. Just as if you wouldn’t purchase the very first house you saw, you shouldn’t go with the very first lender you find.
Shop around different mortgage lenders and banks and get a feel for their fees. You can even contract your own title company if you have a preference, and they offer better rates.
You can even negotiate rates if you are having trouble finding ones that work for your budget. Don’t be afraid to ask about discounts or what you can do to lower the price.
Fees While Owning a Financed Rental Property
Once you’ve successfully purchased your rental property in St. Augustine and paid all of the financing fees, you’ll still have ongoing fees to pay.
Property Tax
Each year you’ll pay property taxes. These rates vary depending on the area where the property is located and the value of the home. Fortunately, these taxes are considered tax write-offs when it’s an investment property.
Maintenance
The upkeep of your rental property will probably be the highest expense after you’ve purchased it. From fixing tenant issues to leaking faucets to scratches on the walls when tenants move out, you can count on spending a good deal on maintenance.
Insurance Premiums
You’ll also have to make insurance payments each month for homeowner’s and landlord’s insurance. These are absolutely necessary to protect you and your rental property.
The good news is these expenses are tax write-offs!
Property Management Fees
Many landlords make a great decision to work with a property management company to take care of their rental property. Having your property in the hands of real estate professionals can increase your profits and take the stress out of owning a rental property.
While you may not want to pay yet another fee after all of the expenses from closing on the property, this is definitely one that will give you more bang for your buck.
Cool Realty is Here to Manage Your St. Augustine Property
Are you looking for a property management company to place tenants and manage your rental property? Look no further!
Cool Realty is St. Augustine’s leading property management company, and we’re here to help you improve your rental income. We’ll handle everything from tenant acquisition to managing maintenance requests to bookkeeping.
Call us today to see how we can help you manage your St. Augustine rental.