Monthly Archives: May 2012

Costs Involved In Purchasing A Property

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Paying what a property costs at the time of purchase is not enough. To buy property is no less than a real marathon. A little knowledge of these expenses helps you sketch an outline of your budget before you purchase house or buy land.

Searches and Inspections

You should not switch over contracts to buy land or purchase house until you are sure to have the necessary searches as well as inspections done. Seek advice from your solicitor or settlement agent regarding what sort of searches and inspections you need to carry out while buying property.

Searches and inspections are as follows:

Building inspections – The cost of building inspections varies with the details of different parts of a house in a report on the house. The report is a written document on the flaws in the structure of the house if it has any. It is a house buying policy to view the report meticulously when you step out to buy property.

Pest reports – This report includes in-detail information on the pest-infested parts of a house and their possible treatment. You should purchase property considering this report.

Surveys – Hiring the service of a legal representative to ensure the position of the house as well as its boundaries will cost you some amount before you buy property.

Costs that Buying an Investment Property Involves

Registration Fees – Registration fees depends on the economy of the state where you purchase house or buy land. It is different in different states. These fees are paid for registering the documents on the purchase of the property.

Loan Mortgage Insurance – You will have to pay loan mortgage insurance if you borrow above 80% of the cost that is to be paid to buy investment property.

Mortgage Application Fee – Lending institutions charge you this fee to make up the costs that the processing of a mortgage application involves. Some brokers ask for an extra fee for processing your mortgage.

Conveyancing – Conveyancing cost differs on basis of whether you hire the service of a Conveyancer or a Solicitor. A Solicitor costs more than a Conveyancer.

Other costs involved with buying property are sinking funds, body corporate fees and liability insurance that you may have to bear in order to cover any sort of damage caused to the property.

Tips For Young Australian Investors

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Young Australians do find it harder than their parents to enter the property market. To ease the pressure of the housing affordability crisis ironically a property investment partnership with family or friends can be an affordable market entry strategy that is mutually beneficial for the majority of Australians. Market entry can be achieved either via first home ownership with the accompanying grant or via an investment property.

A seven step strategy for first time property investors

Start saving early while you are still at school, finish your education and get a job

Don’t rely on the first home owners grant and wait until you need a home. Become a first property investor instead. You may still be eligible to claim the first home owner grant later.

Do a rough check your borrowing power online. The banks love employed singles living at their parents home.

Find a good mortgage broker and a good bank. Borrowing power varies between banks.

If you can invest alone, do it. If not enter into a property investment partnership or find a guarantor.

Search for a cash flow positive property that you can afford or a property with high rental returns and turn it cash flow positive as soon as possible. Some properties are cash flow positive from day one and we can show you how to find them. One method is with a specialized search engine, such as Real Estate InvestAr .

Don’t wait to buy your first property once you are in a position to enter the market. And be careful with speculation. With a buy and hold strategy at the low end of the market the best time to buy is now, that is right now in 2012 (and it is almost always now, but you must be cautious at the peak of a bubble). If you have more money than you can get into the riskier higher end of the market. Higher gains and higher potential losses.