Apologies if I sound like a 15 year old…well I am twice that age but when it comes to dealing with finances, I can easily stand for a 15 year old.
What I am hoping to get out of this post is to clarify my understanding of some basic aspects of Property investment. I would like to get everything on paper (bullet point form). I believe once I have a strong foundation on this, I can go a step further. Until then I am stuck here.
Please expand/refine/suggest what you think should be under following key aspects of IP:
Hope this might help others who are under the same situation as I am!
Buying an investment property in Australia
Income from investment property:
Rental income
Expenses (that can be offset for tax benefits)
Loss in mortgage payments (if rental income is lower than repayments)
Maintenance expenses
Depreciation
Property manager expenses (if used to maintain property)
Strata fee (if any)
Water and council rates
Building insurance
‘Real’ cost to buy an IP
Sell price
+ Stamp duty
+ Bank fees
+ Settlement fee
‘Real’ cost when selling an IP
Sell price
– Agent fee (if involved in selling)
– Advertising cost
– Settlement fee
Net Profit
Profit = Sell price – Buy price
Net profit = Profit – Capital gain tax
buying costs: solicitors/Conveyancer, stamp duty on mortgage, mortgage registration, loan application costs, bank valuation, mortgage insurance, buyer’s agent fees, pest/building inspections
Selling costs: survey, S149, solicitors/Conveyancer, mortgage discharge fees, loan break fee.
Only one reply ….i expected this will become a single post which would list every single possible thing that need to go in the categories.
Hope to hear from more of property experts here
thanks in advance
Land tax may be an applicable holding cost. I just opened up a land tax invoice for an IP in Canberra – ouch
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
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