For anyone getting into the investment property game, there will be a few things to consider. Without figuring out all of the details you could be left with a bad investment property.
Here are a few up-front costs you should consider before diving into the property investment game.
Property Valuations - It is important to get Property Valuations in Sydney and Perth. The property valuers Sydney are going to create your property value to establish the worth of your property. These two markets have been volatile in recent years, due to the recent real estate crash.
A property valuation is different from an appraisal, in that a valuation relies on more factual data for determining value. An appraisal is more of an estimate.Getting a property valuation will provide enough data to help you to know whether or not there is enough equity to cover costs.
Purchase Fees - These include Lender’s Mortgage Insurance, Loan Application Fees, and Stamp Duty.
Lender’s Mortgage Insurance is only required when you’re borrowing more than 80% of the property value. The cost range into the thousands of dollars. While you can pay this as a lump sum, many choose to roll this in, including as part of the monthly payment of the loan.
Loan Application Fees are charged based on the lender. Usually only a few hundred dollars, and some lenders may waive them altogether.Stamp Duty is one of the biggest costs you’ll face when purchasing a property. This is different for each area, so the costs will vary based on location and property.
Pest & Building Inspections - Regardless of the purpose of a property purchase, it is vital to conduct an inspection for structural integrity, as well as for pest issues. Generally you can plan on around $700 for this service for property valuers Perth. The benefit of this service is the awareness provided of any potential issues before investing into a property.
Solicitors & Conveyancers - When getting into the property investment game, a reliable solicitor can make all the difference. A solicitor or conveyancer completes the legal work involved in purchasing real estate, making this an important role in the process. It is recommended to interview a few different solicitors because of how important this role is for your business.
Accountant - Naturally an accountant is an important required professional. It is best to find an expert in real estate law, as they can help your team to identify potential tax breaks. As your portfolio increases and grows they’ll more than pay for themselves. Make sure to partner with a reputable account, perform due diligence when qualifying them to work with your business.
Property Manager - Ahhh… Property Managers. YAY!
Property managers play an integral, almost REQUIRED role in your real estate investment venture. A property manager who knows the ropes will prove highly valuable over time, ensuring that your ROI stays healthy. The role of most property managers is to maintain the property, find suitable tenants, and collect rent. Usually these firms like to collect a percentage, with costs ranging from 4.5 to 10 percent.
Insurance - Insurance is a vital part of real estate investment, for both yourself and portfolio. Some of the more popular options include income protection, life, and landlord’s insurance.
While the first two are fairly self explanatory, Landlord’s Insurance protects against any financial losses in connection to rental properties. You can expect Landlord’s Insurance to cover the building, usually with options of insuring contents inside the premises as well.
As long as you do your research, property investment can be quite lucrative, providing for your future, enabling great tax breaks, and creating strong revenue streams.