That’s a lot of money to buy a house …
When you tally up all the hidden costs of buying an investment property, you could be looking at anywhere between $3,000 and $10,000.
Yup. That’s a lot of money.
But before you let that number freak you out, here are three things that might soften the blow:
#1 – You don’t have to pay it all at once
Just because the total cost might come to $5k doesn’t mean you need that much sitting in your bank account today.
Some of these costs–like rates or Residents’ Association levies – are staggered, and you’ll only pay them after settlement. So not having the full amount upfront doesn’t mean you can’t buy property.
#2 – You’re likely to get a cashback from the bank
A cashback is a lump sum of money your bank gives you when you settle on a property and take out a mortgage with them.
It’s literally cash back in your pocket. You usually get around $3,000–$4,000. So if your hidden costs are on the lower end of the scale, that cashback could cover them entirely.
#3 – You can add these costs to your mortgage
Experienced investors often roll these costs into their loan.
So, if your property costs $800,000 and you’ve got $3,000 in setup costs, you might just borrow $803,000. Simple.
It’s also worth keeping in mind that these upfront costs are tiny compared to the long-term financial gains of investing in property. But–you still need to plan for them.
And remember, everyone’s financial situation is different. So while this guide gives you a ballpark idea, it’s absolutely essential to talk to a financial adviser about what’s right for you.
