The hidden costs of property investment that nobody talks about
Are you considering investing your money in an investment property and becoming a property investor?
If yes, you need to know what costs are involved and how to establish the best ownership structure for your asset. As many newcomers find out – it is not always a simple process to make an investment, especially in property, and it can be even more challenging to find the best ownership structure that fits your needs and requirements whilst minimizing your long-term costs.
To avoid any unpleasant surprises, it is advisable to do some research first and become well aware of the hidden costs that nobody talks about:
- If you have never invested in any kind of real property before, it may come as a surprise that you will need to have financial means to cover more than just the price of the property.
- There are certain costs that must be managed by you, as the investor, so you need to be prepared. The lender’s mortgage insurance is one possible cost if you are intending to obtain a loan to cover a high percentage of the property’s price.
- There is also the loan application fee, which may be a few hundred dollars, and the stamp duty and registration fees, which is probably one of the largest fees you will need to pay and will possibly amount to thousands of dollars.
- Other costs may include building inspections, pool inspections, pest inspections, accountancy fees, a property manager, maintenance and insurance, and hiring a trustworthy and experienced solicitor to help you with the legal part of the purchasing process.
There are some items in the checklist which need your careful consideration when you are planning to invest in property and work out affordability.
When deciding to proceed with investment in property, you should also think about the structure of the ownership. Again, the choice depends very much on your set goals, ability to take risks, financial strength, and other aspects. So, you need to put in balance several options and see which one suits you.
Get advice and guidance.
Matters such as your ownership structure offer quite a few options to consider. Individual or joint ownership, ownership through a company, partnership, or trust, or ownership via your Self-Managed Superannuation Fund each carry associated risk and reward profiles.
Each structure has pros and cons for your unique scenario, so you will need to look at each option and make the correct choice for you. Doing this in the correct manner right from the start will help you manage your risks and will get you closer to the investment goals you want to reach. Since investing in property involves a considerable amount of money, you are well-advised to do things the right way from the start.
In all this process, there is one part that is often very challenging for most investors. Even if you are an excellent business person and have great management skills, the legal chapter may be hard to tackle. That’s why you need an experienced property lawyer you can trust.
Aylward Game is a Brisbane, Gold Coast and Sunshine Coast legal practice with a great reputation and key knowledge in the property law area. Our professional staff is experienced in all aspects of buying and selling a property, both commercial and residential.
Speak with us today on 1800 217 217.
To speak with an expert in the area, contact 1800 217 217 to arrange a consultation.
United Service Club
Level 4, 183 Wickham Terrace, Brisbane QLD 4001
Free: 1800 217 217
Phone: 07 3236 0001
Fax: 07 3236 0005
Email: [email protected]
Article Source: Property investment