There are many benefits to having an investment property, including the potential for solid financial returns. However, without proper planning the costs can outweigh the benefits. Thinking about the upfront and ongoing costs of an investment property will help you decide if it is right for you.
Possible upfront purchase costs
When buying an investment property, typical upfront costs you have to pay at purchase include:
• Pest and building pre-purchase inspections
• Stata searches
• Stamp duty
• Conveyancing and/or legal fees
What are the ongoing costs?
There are a number of ongoing costs involved with an investment property. These need to be taken into account when calculating your estimated return. Common ongoing costs include:
• Council and water fees
• Body corporate fees (for strata properties)
• Letting and re-letting costs, including advertising
• Mortgage fees and repayments
• Property management fees
• Repairs and maintenance