Property Investment Tips: Don't forget about ongoing costs

By the resi financial blog team, 20 April 2015

Property Investment Tips: Don't forget about ongoing costs

If you've decided you'd like to try your hand at residential property investment, entering the process with a clear set of expectations is key. These aren't just limited to the property itself, either, or the upfront cost of buying the house - you've got to think about investing in a home as a journey with any number of financial twists and turns. There is wide array of ongoing costs attached to your venture. Here are some of the top ones to bear in mind. 

Tax on rental income 

If you own a rental property, you're obligated to pay tax on the income you receive from it. This is where you need to start thinking carefully about the strategy you're going to take - will the investment be negatively or positively geared? The latter typically means you'll pay more tax. Because the income you get in the form of rent from your tenants outweighs your expenses, this will have to be declared on your tax return. 

Repairs and maintenance

As a landlord, you're responsible for maintaining the property for your tenants. This can be a considerable sum over time, particularly if the property needed a fair bit of work to start with. Aesthetic repairs and general costs for keeping the home up-to-scratch can be relatively straight forward, but you should also allow room in your budget for unforeseen events, such as malicious damage or if your tenants fail to pay rent. Landlord's and contents insurance can be a good way to protect your investment against these unexpected turns but be aware they also carry an ongoing fee. 

Strata fees

If you own a unit or apartment, they will typically come under a body corporate structure. Each state has a different set up for this scheme so check which rules are applicable in your area before purchase. These fees are paid to the owning body to carry out maintenance and other duties in common areas, such as pools, gardens and gyms - you might also need to pay a special levy on occasion to allow for bigger projects or repairs.

Now that you're aware of some of the ongoing costs of owning an investment property, you can organise your financial priorities and determine what you can afford when applying for a loan. For a wide range of investment loan options, speak to a loan specialist at resi today. 

Categories: Property Investment