Hidden charges to be considered at the time of buying a house

Loan application Fee

You must consider the processing fee while making budget. Lenders normally charge few hundred dollars for legal contracts and credit checks.

Legal fees

A buyer has to pay transfer fee while buying a house from previous owner. The buyer also needs to seek the service of a legal professional for sealing a deal. This charge varies between $1,000 and $4,000.

Valuation fees

A property needs to be evaluated by the lender. Lenders pass on this fee to the borrower in form of application charge. Be ready to pay between $150 and $300 towards evaluation process.

Stamp duty

Lauchlan Leishman advises that one must put aside a significant amount of money for paying towards stamp duty charges. The amount of stamp duty also depends on the value of property and state you are residing in. There is some discount for first time home buyers.

Inspection fees

Inspection of property is one of the most important tasks that should be performed before buying a house. You may have to pay anywhere between $200 and $1000 for inspection as per the size of property you are buying.

Council rates

These kinds of fee are imposed on homeowners for various facilities like local library membership and garbage collection. It varies as per state and locality.

Apart from the above mentioned charges, Lauchlan Leishman advises that one must also be familiar with charges like mortgage insurance, body Corporate fees, moving costs, utilities, furnishings, repair of furniture etc.

Rate of vacancy is tight. However, few of us can realize the actual situation. Let us check a figure of Australia to realize how tight the rate of vacancy is. As per a survey, 475 out of 1600 odd post codes have vacancy rate below 1%. This means 30% of the post codes have less than one percent vacancy rate. There’s more information available from the survey. There are 7 out of 10 post codes that have below two percent vacancy rate. 87% of the post codes have less than 3% vacancy rate. These figures clearly indicate how tight the situation of vacancy rate in Australia is. With excess demand of rental properties, there is increasing trend in the price of rental properties. Therefore, property investors are getting more interested to buy properties for increasing their rental income.     

There is more good news for real estate investors. Rental component of Consumer Price Index (CPI) is rising faster than average inflation rate. This trend is persistent since the year 2008. Australian Bureau of Statistics had come up with a separate rental housing inflation way back in the early 1970s. The recent trend, what is evident from 2008, was not seen earlier. This is, in fact, a good signal for the landlords as well as the property investors because they can earn more from rental income.

Since mid-2008, weekly rent is increasing at a rate of 5.7% per annum throughout Australia, as per CPI rental index of Australian Bureau of Statistics. The yearly increase of rent on a yearly basis in Brisbane is 6% whereas in Melbourne the yearly rent increase is 4.8%.

Increase can also be seen in the gross rental yields across Australia. As per ABS report, gross rental yield of traditional suburban detached housing is 4.5%. The small-lot housing is increasing at a better rate, more than 5%.

Now, let us check some of the places where rental income is increasing at an impressive rate. There is an undersupply of new houses in Queensland. That’s why the rental yields here are also very high, exceeding 6% gross.

Some of the hottest rental spots that property investors should look at include inner-western suburbs of Brisbane, Mackay, Toowoomba, Gladstone, Calliope, Emerald, and Roma. Northern suburbs of Gold Coast and Sunshine Coast are also witnessing increase in rent, which are higher than the statewide average of six percent per annum. After analyzing all these aspects, Lauchlan Leishman has suggested property investors to invest more and more in Australian properties that can yield higher rental income for them on a regular basis. For More, Visit – http://www.lauchlanleishman.com.au/