When buying an investment property, you need to know that there are more costs then just your mortgage repayments

When owning an investment property, there will be ongoing expenses that you can’t pass on to your tenant. You should certainly consider before you purchase a property.

These expenses add up and may affect your ability to pay your mortgage, so it is important you know what those expenses are before you buy an investment property.

It is a good idea to set some money aside for those expenses to avoid any nasty surprises.


Rates can be extremely expensive, depending on what part of the country you live in.

Generally, they are based on land values, which is why council rates in high end suburbs are higher.

They are designed to cover the cost of delivering essential services to your area,
things like bin collection, road maintenance, local public works and so on.

So, really, they are a necessary evil.


Water rates are different. It varies from state to state, but generally the landlord can pass on the water usage to the tenant, as long as the property is individually metered.

The rest of the water rates bill has to be paid be the owner


Few investors are prepared for the upkeep of an investment property.

Apartments generally require less maintenance, while older homes need a bit of TLC over time.

The older the home, the more potential problems it will face, the plumbing or electrical may have problems.

It is a good idea to set aside some money each week to help cover these costs.

You will soon know if you are putting enough away!

Even if your property is not that old, things do break and it will need simple repairs.

If the hot water is not working, for example, with a tenant in the property you will need to get this fixed immediately.


This is one area where homes really do have the upper hand over apartments.

Buying an apartment is usually cheaper than a house, but the body corporate fees can easily reduce that advantage very quickly.

These fees are to pay for the costs of maintaining the common property, facilities and gardens, as well as paying for compulsory common property insurance.

The smaller the apartment block the cheaper the body corporate rates will be as will have less common areas.

It may be a good idea to avoid buying in large complexes for a multitude of reasons, one of which is the high body corporate costs you will have to pay to maintain the pool, the elevators, the gym and so on.

These places are great for renters, not so great for owners’ back pocket.


Insurance is vital for managing an investment property, but of course it is an additional expense. You may need to consider house as well as contents insurance if the property is furnished

When you rent out a property then you need to consider landlords’ insurance to help protect against damage and unpaid rent.


You will need help from time to time, but there is no need to employ a full time property manager that will cost you anywhere from 7-15% with hidden costs.

No one will care more then you when it comes to looking after your property!

There is another way, and that is to use online property management software like RealRenta. The platform will collect and track the rent on your behalf, doing all your invoices and receipts, sends out rent reminders and breach notices when rent is not paid (by email and text – SMS) all automatically.

You can check the tenant on bad tenant database, you can get a professional to check the tenant’s references, you can advertise your property for rent on multiple sites and tenants apply online, whereby the owner can manage these tenant applications to find the best tenant.

All emails and text messages to your tenant are logged to stop the he said she said and to have a buffer between you and your tenant

RealRenta is a one stop shop for everything you need to manage your rental property. Tenants can even put in maintenance requests and owners can then manage the requests. RealRenta even has a partner’s page where you can find discounts on other services you may need.


Once you have an idea of your costs you can build those into your budget to determine how much rent you will need to charge.

At least the money will be going into an appreciating asset rather than paying off someone else’s mortgage, as is the case with renting!

Jason Gwerder
Friday, 2 September 2016

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