Fees associated with purchasing and maintaining an investment property
One off fees/Costs:The first things that you need to consider before purchasing an investment property is the fees and charges associated with the purchase.
- Stamp duty: this fee is always required to be paid when you purchase a property, regardless it is for owner occupied or investment purpose. This is one of the most expensive fees that you need to pay to complete the purchase. Stamp duty is charged based on each state or territory.
- Legal fees and conveyancing costs: these fees are charged by your conveyancers/solicitors.
- Title transfer: this fee is charged by the Government in order to transfer and register your name on the title of the property.
- Valuation fee: having the property valued and finding out the potential income that you can get from the property is very important. You may need to pay some fees for the specialized people to do this for you.
- Rates: you are required to pay for any council rates or water rates charged on the property.
- Maintenance costs: you are required to do regular services on the property such as regular pest inspection or plumping inspection. If there is any damage to the property and you need to fix or repair it, you will also need to pay for them. However, you will be able to claim tax paid on the maintenance fees.
- Levies: when you purchase a strata title property or an apartment, you are required to pay for levy for the body corporate to cover to cover any damage on the building or maintenance fee.
- Insurance: If you purchase a freehold property, you may need to pay insurance to insure the building and any contents if required.
- Interest: Interest on the loan borrowed from the bank. Most of the time, the rental income is not enough to cover the interest payment.
- Agent fees: if your property is gone through a managing agent, you also need to pay agent fees for them to look after your property.