It's important to consider all costs when thinking about investing in property.
An investment property can be a solid place to put your savings. We all know about the financial benefits such as rental returns and capital growth, but what about the costs?
All agents charge a fee to manage an investment property, so if you’re not going to manage it yourself, keep the agent’s costs in mind.
In general, an agency will charge marketing fees to advertise your property, as well as a monthly retainer for managing the relationship with the tenants.
There is also a potential loss if there is a gap between tenants. You could end up covering all the mortgage costs yourself for however many days, weeks or months the property remains vacant.
Other costs on your check list should include a buffer for damage - or insurance against damage.
Any damage caused directly by your tenants should be covered by the tenants. However, repairs from general wear and tear are usually the homeowners’ responsibility.
Owning an investment property can be financially very appealing, but being aware of all the costs, as well as the benifits, will make you a much better prepared buyer.