Are you thinking about buying an investment property?
If the answer’s yes, listen up. While buying an investment property is a great first step to take in future-proofing your wealth, it’s important to know exactly how much the endeavour will set you back before you get too carried away.
As with any property purchase, you’ll have to spend more than just the cost of the dwelling in order to secure the premises.
Some of the other costs associated with buying an investment property include:>
1. Purchase fees
These can include:
- Lender’s mortgage insurance – if you need to borrow 80 per cent or more of the property’s purchase price, you’ll be required to pay lender’s mortgage insurance (LMI), which can be thousands of dollars. This fee can be paid as a one-off sum or capitalised onto your loan.
- Loan application fee – depending on the lender and investment product you want, you may be required to pay a loan application fee. This fee could set you back a couple of hundred dollars.
- Stamp duty – this is one of the biggest costs you’ll face when buying a property. The amount you have to pay in stamp duty will depend on where you buy and how much you pay for your property.
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