Initial and Ongoing Costs of Property Investment
Date: Friday, July 04 @ 20:43:58 MST
Topic: Real Estate
Property investors need to calculate all their costs accurately to figure out what their profit will be. You can't just look at the cost of the purchase price and interest. A large cost in addition to these is the stamp duty, which can be up to 6% of the purchase price. Legal and conveyancing fees must also be paid, even if the cost is tax deductible for investment properties. Then there are the ongoing costs.
Ongoing costs of an investment property are usually for maintenance and insurance. Things break down and wear out and you as the landlord are responsible for providing a safe and habitable environment for your tenants. So if the water heater suddenly leaks all over the floor, you not only have to replace it, but probably all the carpet around it as well. If you have insurance that's excellent, but it is another cost to pay on an ongoing basis.
Tenants do not have to pay the rates and other government taxes, which means that you must. In some cases the landlord also pays the water rates. And if you thought owning an apartment was the way to go, don't forget you have those Body Corporate fees to pay every year. These can be quite high if there is a pool or common garden in the complex.
Visit Saville Australia (http://www.savilleaustralia.com.au) for more information on property investment and luxury apartments for sale in Perth, Australia.
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