The hidden costs of being a landlord – and how to prepare for them
“As a general guide, it is a prudent starting point to budget for 1 to 2 percent of the property for care every year, but this may change to a significant extent.”
Property management fees
“Investors usually forget to take into account the property management fees ranging from 6 to 10 percent of the rental income depending on the agency and service level, Tr says Tropoulos.
“Also, you will re -apply each time a tenant is emptied. This is usually a to two -week rent to meet the cost of buying a new tenant.
“You should also consider the potential court representation costs if a tenant dispute occurs. These additional fees are usually stated in the management agreement, so it is important to read carefully.”
Insurance premiums
“Host insurance is recommended for property investors, Tr Tropoulos says. “Rental income provides a scope for damage to the tenant, legal expenses and loss of certain responsibility risks.
“Although it is attractive to skip this cost, the financial consequences of unexpected events such as property damage or tenant assumed may be important.”
Before choosing a policy, it is important to investigate about the different nuances between the home and the host insurance cover and the change in the costs related to them.
Compliance and security regulations
“Smoke alarm service, pool certificates and costs for electrical safety controls can now be compulsory and collected in many states, Tr Tropoulos says.
“Adaptation costs may change, but you should budget at least $ 500 annually for security checks such as smoke alarms, pool controls, if any pool controls and electricity or gas compatibility, if any.
“Incompatibility can lead to serious consequences, including fines, legal responsibility and insurance demands. Staying harmoniously is not only about marking boxes, it is about helping to protect your presence and people living in it.”
Council Rates and Layer Fees
“Council rates vary depending on the area of local government, but typically varies between $ 1000 and $ 3,000 a year, Tr Tropoulos says. “Strata fees depend on the size and complexity of the building.
“Older complexes generally have less ongoing costs and less special tax, because they are often built with less opportunities. On the contrary, new developments with pool, elevator and gyms often have higher layers and special tax risk due to the ongoing cost of maintaining these facilities.”
Tropoulos usually costs tens of thousands of dollars with more or more varying layer fees and potentially cost -tens of thousands of dollars, which are more than $ 2000.
Depreciation program
“A professional depreciation program can be a valuable tool to maximize your tax cuts, Tr Tropoulos says. “It is especially useful for more new properties or those who have undergone the last renovation. The cost of a person prepared by a qualified amount of surveyor typically varies between 400 and 800 dollars and the report is valid for up to 40 years.
“For most investors, tax savings are more outweighed than the preliminary cost, which makes it a long -term smart investment.”
Terri Scheer is the leading host insurance expert in Australia. Visit for more information terrischeer.com.au.
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