Costs of investing
Owning property and shares comes at a cost. There is a cost in purchasing the asset, holding it and then an additional cost when you sell it. The total outlay can vary greatly. In this chapter, we outline the common costs and give you an indication of the amounts involved.
Property costs
Costs in owning property will vary, depending on many factors, such as which state the property is located in, the purchase price paid, the size of the mortgage, interest rate, annual rental income and the sale price of the property. Following is a summary of the main costs incurred as a property investor. The major difference in the nature of the costs is the location of the property, as some states and territories will have more or less costs and possibly different names for the costs listed here.
Buying property
The following costs can be incurred when you buy a property:
• Stamp duty. This government fee is the most expensive of all purchasing costs. It is approximately 5 per cent of the purchase price.
• Land Titles Office (LTO) registration fee. This fee is payable when purchasing (not selling) a property.
• Government searches. A conveyancer or lawyer will need to search official documents to ensure that you are actually buying what you think you are buying.
• Bank ...
