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Just like with any investment, it's important to not only understand your initial outlay, but any ongoing costs that can arise. Here are some of the more common costs associated with an investment property.
Aside from the deposit, there are other costs involved when buying a home. Here are some of the most common fees to be aware of:
Stamp duty is a state and territory government tax based on the purchase price of the property. It’s paid to the state or territory the property is in, which means the amount you’ll need to pay will vary depending on where your property is located as well as on the price of the property.
Stamp duty is often a significant cost, so it’s vital you take it into account when working out your costs. Our upfront costs calculator can give you an indication of how much stamp duty you could have to pay as well as other costs to consider when buying.
Although these may seem expensive, the price you’ll pay for these reports could be a fraction of the cost (not to mention headache) if you end up with pest infestations or building issues after you’ve bought. In some cases you may be able to combine both the pest and building inspection, which should help to keep costs down.
There are several legal steps involved with buying a home, so make sure you engage a solicitor or conveyancer. These include:
Depending on your lender and your loan type, there may be various fees to establish your mortgage. These could include an application fee as well as valuation and settlement fees.
The title transfer fee is a state/territory government fee for transferring the property title from the seller to the buyer. The cost can vary significantly depending on what state or territory the property is in – you can find details of the charges on the website of the state/territory revenue office.
This is another state or territory fee. As a property is the security for the mortgage, the state/territory government needs to register the home loan so that any future buyers can check for any prior mortgages on the property.
It’s a really good idea to get cover for both your investment property and contents that you lease out to tenants from loss or damage caused by flood, fire, storm, theft and more. Property investment carries inherent risks - even with finding the right tenant. Landlord Insurance provides cover for a range of events, so you have less to worry about.
Other than regular loan repayments, the most common ongoing costs related to owning an investment property include:
Investing in property? Research first. Download the property investor guide and use our online property market research tool to check sales histories, expected rental income, suburb demographics and estimated sale prices.
Decide what you want to achieve before you make an investment. Is your goal to build wealth from capital growth? Will you buy using equity in your current property? Are you interested in rental income or negative gearing?
This information has been prepared without taking your objectives, needs and overall financial situation into account. For this reason, you should consider the appropriateness of the information and, if necessary, seek appropriate professional advice. Read the terms and conditions before making a decision if the product is right for you.
Landlord Insurance is issued by Westpac General Insurance Limited ABN 99 003 719 319 (except workers compensation cover where applicable). St.George – a Division of Westpac Banking Corporation ABN 33 007 457 141 (the Bank) distributes the insurance, but does not guarantee the insurance.