An investment property has many benefts and if chosen carefully can provide solid fnancial returns. However, it can also be an expensive asset to acquire and maintain. There are many upfront and ongoing costs which need to be taken into account when taking the plunge.
Initial Costs
The following are costs which you will incur when the purchase is frst made.
Initial Costs
The following are costs which you will incur when the purchase is frst made.
Expense
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Frequency
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AMOUNT
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Annual amount
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Deposit | Once off payment | INSERT AMOUNT | The deposit needed to purchase a home is 10% of the asking price. However, if you borrow in excess of 80% of the property value, you will be required to pay mortgage insurance. |
Loan Establishment Fees | Once off payment | INSERT AMOUNT | Some fnancial institutions will charge an establishment fee to cover the set up costs for your loan. Consult your fnancial institution to determine establishment fees. |
Mortgage Insurance | Once off payment | INSERT AMOUNT | If your deposit is less than 20 percent of the value of the property, the lender may require you to pay mortgage insurance. Consult your fnancial institution to determine likely costs to insure your loan. |
| Connections | Once off payment | INSERT AMOUNT | The cost of the connections for all the utilities and services you will need to have installed in preparation for the tenatns who will be occupying your property. |
| Stamp duty | Once off payment | INSERT AMOUNT | Stamp duty costs will differ from state to state and will depend on the purchase price of the property. Stamp duty for an investment property is usually higher than a principal home. Refer to the following link to calculate costs: |
| Legals | Once off payment | INSERT AMOUNT | This cost covers the legal transfer of ownership. This is usually conducted by a solicitor or conveyancer. It may cost approximately $600-$800. |
Well, let's go to invest!
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