Investing in property can be a lucrative way to build wealth, but it’s essential to understand all the associated costs. Many new investors focus only on the purchase price or deposit, but hidden and ongoing expenses can impact cash flow and ROI.
With Build New Homes, investors can plan effectively and make smarter investment decisions by knowing exactly what costs to expect.
1. Deposit and Upfront Costs
Deposit:
- Typically, 5%–20% of the purchase price.
- Some investors use government-backed loans or incentives to reduce the deposit required.
Upfront fees:
- Stamp duty: Varies by state.
- Legal and conveyancing fees
- Loan application or establishment fees
- Building inspection or valuation fees
2. Loan Repayments
Principal and Interest (P&I) repayments are usually the largest ongoing expense: it depends on loan amount, interest rate, and loan term.
Interest-only loans are an option for investors seeking short-term cash flow benefits, with lower monthly repayments early on.
3. Property Management Fees
If you hire a property manager:
- Typically, 6–8% of weekly rent.
- Covers tenant sourcing, rent collection, and property maintenance coordination.
4. Insurance
- Landlord insurance is essential to protect against loss of rent, property damage, or liability claims.
- Average cost: ~$1,000–$1,500 per year for standard coverage.
5. Maintenance and Repairs
- Even new builds require ongoing upkeep: minor repairs, painting, garden maintenance, etc.
Tip: New builds typically have lower maintenance costs than older properties, which improves cash flow.
6. Council Rates and Utilities
- Council rates: Local government charges for services; vary by suburb.
- Water, gas, and electricity: Usually paid by tenants, but investors covering some utilities may increase appeal.
7. Body Corporate / Strata Fees (if applicable)
- Applies to apartments, townhouses, or communities with shared facilities.
- Covers maintenance of common areas, insurance, and administrative costs.
8. Tax-Related Expenses
- Accounting fees: ~$500–$1,500 per year to prepare investment property tax returns.
- Depreciation schedules: One-off cost of $300–$700 to maximise deductions.
- Negative gearing & CGT planning: Professional advice ensures maximum legal tax savings.
9. Optional Expenses
- Renovations or upgrades: To increase rent or property value.
- Marketing costs: If self-managing, advertising for tenants.
How Build New Homes Australia Helps Investors
- Transparent cost breakdowns before you commit.
- Turnkey new builds with lower maintenance and insurance costs.
- Guidance on tax benefits, financing, and grants to improve ROI.
Here is an example of total expenses for a $600,000 Investment Property:
1. One-Off Upfront Costs
| Expense Category | Annual Cost |
| Deposit (10%) | $60,000 |
| Stamp Duty | $12,000 |
| Legal & Conveyancing Fees | $1,800 |
| Loan Establishment Fees | $500 |
| Building/Property Valuation | $400 |
| Depreciation Schedule | $500 |
| Total Upfront Costs | $75,200 |
2. Annual Ongoing Costs
| Expense Category | Annual Cost | Monthly Cost | Notes |
| Loan Repayments (P&I) | $40,800 | $3,400 | $540,000 loan at 6.5% over 30 years |
| Property Management Fees | $3,276 | $273 | Typically, 7% of weekly rent ($900/week) |
| Insurance (Landlord) | $1,200 | $100 | Covers property & rental income |
| Maintenance & Repairs | $1,500 | $125 | Budget for minor repairs and upkeep |
| Council Rates | $1,800 | $150 | Local government charges |
| Utilities (if paid by investor) | $1,200 | $100 | Water, gas, electricity (if applicable) |
| Body Corporate/Strata Fees | $2,500 | $208 | Only applicable for apartments/townhouses |
| Accounting & Tax Prep | $1,200 | $100 | Annual accountant for property tax |
| Total Annual Ongoing Costs | $53,476 | $4,456 |