While property as an asset class finished strong off the back of Covid fluctuations in 2020 rushing out and getting your first investment property should not be done without your due diligence.
Money – the ever-alluring Holy Grail. It’s something on our minds almost 24/7, and yet for many of us, we can never seem to make enough of it. In order to obtain more of this paper gold we turn to different investment opportunities, such as the property market, with varying results. The property market is much like the wild west, with many companies and individuals offering ‘get rich quick’ solutions, which are often extremely convincing and can cost you hundreds of dollars for useless advice. So, we’ve scoured the internet looking for the best advice, all for free, and here’s what we found!
If you’re not watching closely, hidden fees can really dent your earnings, with taxes such as Stamp Duty and GST commonly some of the biggest, ranging in the thousands. For example, if you want to buy a home in Queensland that’s valued at $500,000, you can reasonably expect to pay the following:
- Property value: $500,000
- Conveyancing and legal fees: $1800
- Stamp duty: $0 for first-home buyers, $8750 for others
- Building and pest inspection (combined): $600
- Mortgage registration fee: $187
- Transfer fee ($35 for every $10,000 over $180,000): $1120
- Loan application fee: $500 – $600
- Mortgage insurance: $8000
- Council and utility rates: roughly $500 (per quarter)
- Total costs = $512,707 – $521,557
WIth expenses ranging up to 20k, and potentially more if repairs and maintenance need to be performed on the property, it’s important to critically evaluate what the best location and type of investment is right for you.
One interesting fee you may know of, is the building and pest inspection fee at around $600 depending on the supplier. Although many people may be reluctant to spend extra money, this can act as insurance and prevent unwanted expenses in the future to fix problems caused by termites or other pests in your property or stop you from buying altogether. Speak with your Jim’s Real Estate professional who can connect you with your local Building inspector or contact Jim’s Building Inspector direct.
By buying the right property in the right location at the right price, and by holding it for the right time, you can get sufficient ROI to sustain a reasonable profit.