Here are some costs to consider before buying an Investment property!
- Check potential rental income
- applicable interest rates as well as your specific loan details
- TAX
- Tenant change fee
- Insurance costs
Your rental property is a valuable asset. So it can be a good idea to have insurance in place before you settle. Taking out cover after you have exchanged contracts can mean you're protected if the property is damaged before settlement.
You may face additional risks once the property is tenanted. Landlord insurance can provide extra protection that goes beyond regular building or contents cover. Valuable features include protection against damage caused by the tenant or loss of rent if the tenant skips town.
Your policy may cover the value of fixtures and fittings or any furniture you provide. You're not responsible for insuring the tenant's belongings.
Insurance premiums vary. So be prepared to shop around and read the fine print to understand what you're covered for and what's excluded.
- Property cost considerations
- Pest and building reports
Check for structural soundness by doing a pest and building inspection before you buy. These are sometimes done together to save money. You could expect to pay more for these if the property is in a regional area.
- Lender's mortgage insurance
- Council rates
The landlord pays council rates, although there are exceptions depending on where you live.
- Repairs and maintenance
Landlords have to respond straight away if a tenant requests urgent repairs. The landlord is responsible for organising repairs. But the tenant can be asked to pay for any damage they cause.