| The Costs of becoming a Property Investor

There are many unexpected expenses you need to be aware of when you decide to become a property investor.

Investing in property has many financial benefits.  The purchase price of the investment property is where it starts.  There are quite a few extra both upfront and ongoing costs involved.

Fees
Your mortgage on your investment property will entail more than just principle and interest payments.  You will most likely also need to factor in:

• Establishment, legal and application costs
• Bank valuation fees
• Monthly or annual fees
• LMI (if you have a deposit of less than 20%)

IMPORTANT: Read the fine print. – There may also be a range of other fees

Purchase Costs
Purchasing a property will also incur other associated costs – Such as:

• Stamp duty, (varies from state to state)
• Building and pest inspections
• Solicitor or conveyancer fees
• Legal transfer of ownership
• Registration fees
• Title searches

Insurance

• Building Insurance – To protect your property against theft, flood fire, storms and other risks.
• Landlord Insurance – To cover you if your tenants default on the rent or damage your property

Other Costs to Consider

• Repairs and maintenance (Plumber, Electrician, Handyman)
• Renovation costs
• Pest control
• connecting utilities and services
• Finding new tenants (advertising)
• Land tax
• Accountant’s fees
• Legal fees
• Strata and body corporate fees
• Damages if you have problem tenants

Council Rates

Many property investors forget to factor in council and water rates.  These costs need to be factored into your overall returns.

Property Management Fees
a good property is well worth the investment. They will take care of:

• Working out the rental value of your property
• Marketing and viewings for tenants
• Doing background checks and screening potential tenants
• Regular inspections and reports
• Organising repairs and maintenance
• Dealing with complaints and other issues
• Unemotionally dealing with legal issues like evictions