When you are considering investing in property, there are many hidden fees that can come into play. When it comes to buying a home, for example, the cost of maintenance is often underestimated and can lead to headaches down the road. To avoid these problems, take time to consider these four hidden costs before making your decision.
1. Conveyancing Fees
These will vary depending on how you purchase your home and where it is located. For example, if the property is purchased for cash or through a bank transfer then there are no conveyancing fees. However, when buying with another person (i.e., as joint tenants) these costs can quickly add up to thousands of dollars due to stamp duty and legal fees.
2. Stamp Duty
Stamp duty is a fee that varies depending on the state you are buying property in and how much it costs. For example, if you live in NSW then stamp duty will cost an additional 0.75 per cent of your purchase price. In Victoria, however, this amount increases to as high as two percent for those who buy more expensive properties (i.e., those priced at $600 000 or more).
In some states such as Queensland and Tasmania, there may be no stamp duty payable when purchasing a home but instead, a transfer fee must be paid which can range from around $100 to several hundred dollars. This sum also needs to be added into the total upfront fees associated with investing in property before making any final decisions regarding whether or not it is a cost you can afford.
For more information on the rates and how this fee is calculated visit your state government website or speak with an accountant who specialises in property investment.
3. Building and Pest Inspection
Before purchasing a property you should always get it inspected by either an independent building inspector or pest control officer to ensure there are no issues.
If your home needs repairs after the inspection, these fees can quickly add up and take away from any money that might be left over for investing in another property. For example, if $3000 is set aside for emergency expenses then this amount will need to be closer to $4000 when factoring in potential repair costs associated with buying damaged property.
As such, it is important to not only consider the cost of these inspections but also how deep they go into inspecting different aspects of your new investment (e.g., electrical work; plumbing). This way you know exactly what kinds of problems may arise down the line.
4. Mortgage Registration
These fees are not always taken into account when purchasing a new home because they do not need to be paid until the settlement date. As such, there is an element of surprise for many buyers who only realise these costs exist after signing on the dotted line and handing over their cash (or cheque) to close the sale!
Mortgage registration fees can range anywhere from $30 – $100 depending on what state you live in but this cost must be factored into your total upfront investment expenses before moving forward with any purchases. Otherwise, it could lead to financial problems down the road if money that was initially set aside runs out sooner than expected due to hidden or unexpected charges.
After speaking with your conveyancer about mortgage registration fees you should also find out what the standard waiting time is for a home to be formally registered as yours. This way you can ensure that the property has been given an official stamp of approval and there are no issues with it being resold at a later date (i.e., if your mortgage cannot be paid off in full).
In addition, depending on whether or not you have purchased a brand new house or one that was previously owned, this process could take much longer which means more money spent on interest rates during those extra months/weeks/days until settlement occurs! As such, it pays to keep these costs in mind before making any final decisions about buying property so everything runs smoothly from start to finish without hidden fees coming up unexpectedly along the way.
It’s important that you consider all these fees when making decisions about which properties are right for you. You can also try to minimise your financial costs by finding the right mortgage for you. If you’re looking to invest in property, Joust instant match is a service that provides you with home loans personalised to your needs. To avoid any unnecessary costs, do your research and speak with a financial planner about the best course of action.