Property Investor Tips

Understand the full costs of buying a property

Posted on Tuesday, June 23 2009 at 2:10 PM

Apart from the 'sticker price' on a property, homebuyers and investors should be aware of the associated costs that come along with purchasing a house or unit.

The Real Estate Institute of Victoria advises that these include:

– Borrowing costs

Before beginning the search for a new home, ascertain how much you can afford to borrow, then obtain loan pre-approval from the bank. What you borrow has to cover more than just the cost of the property; there is the loan establishment fee, mortgage insurance and stamp duty.

Fees will vary from lender to lender, so be prepared to shop around for the best loan to suit your needs.

– Stamp duty

In Victoria, stamp duty on a property can be as high as 5.5 per cent, depending on the value of the property. It varies from state to state.

– Valuation report

It may be worth obtaining an independent valuation report on a property.

– Legal costs

Assistance and advice from a solicitor will help you navigate the contract process. Fees are negotiable, so shop around and compare rates.

– Building and pest inspection reports

Such a report may save you thousands of dollars in the future and will show whether you need to carry out repairs. To save time and money, investigate your choice of inspector and their availability well before you begin property negotiations.

Source: Real Estate Institute of Victoria

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