Nuts and Bolts
Decided that you’d like to buy property? Read on …
Buying property is a big committment and you can’t be too prepared. Start by reading some of the books mentioned in Property 101. Most importantly, decide if the property you plan to buy is going to be a home to live in or an investment property to rent out – it’ll make a big difference to the type of property you buy.
If you want to start checking out property try Buy My Place, Domain, Homehound, or Realestate.com.au. Some of the sites will let you set up alerts so you’ll get an email every time a new property comes onto the market in the areas in which you’re looking.
If you’d like help with property investing consider Margaret Lomas’ Destiny Financial Solutions or Monique Wakelin and Richard Wakelin’s Wakelin Property Advisory (if you’re in Melbourne). Probably a good idea to read their books first (listed in Property 101) so you get a feel for their different philosophies. And check out their fees first, they could be high.
The First Home Owner Grant
Íf you’re buying a home to live in, you might be eligible for the First Home Owner Grant.
Stamp duty is going to be one of your biggest costs outside of the cost of the property itself – try using the stamp duty calculator at MoneySmart to see how much you’re up for (just scroll down until you get to the stamp duty calculators). It’s a State and Territory Government tax so how much you pay will depend on where you buy and how much you pay for the property.
When it comes to choosing a mortgage, talk to people you know who’ve purchased property and get some tips from them. It can be pretty confusing as there seem to be a million options on the market – try the following mortgage comparison website, that’ll help to give you an idea as to what’s out there. Whatever you do, look around to get the best deal.
3) Before you buy …
Building and pest inspection
The Australian Institute of Architects can send someone out to inspect any property you’re thinking about buying and give you a full written report (so you know you’re not buying a lemon). You’ll find all the details and sample reports on their website. It also has lots of helpful fact sheets about buying property that you can download.
Herron Todd White is an independent property advisory group that can provide you with a valuation after inspecting a property and analysing the local market – a good idea if you want an unbiased opinion as to what the property is really worth.
4) After you buy …
Make sure that from the day you officially buy the property (that is, from the day of the auction, etc.) you’re adequately covered by insurance. If you purchased a home to live in, you’ll need house and contents insurance. If you purchased an investment property you’ll need house and contents insurance as well as landlord’s insurance. See the section on Insurance for more details.
If you’ve purchased an investment property you should have a depreciation report drawn up as many of the fixtures and fittings (and sometimes even the building itself) can be depreciated over a number of years – this means more money in your pocket thanks to Australian taxation laws. Try BMT Tax Depreciation (Quantity Surveyors) and give their report to your accountant at tax time.
Find a solicitor
You’ll need the help of a solicitor when you’re buying a property. Search for a qualified solicitor by Googling the Law Institute or Law Society in your State or Territory.
Find an accountant
An accountant will be able to help you maximise allowable deductions related to the purchase of an investment property on your tax return – use the online search tool to find yourself a Chartered Accountant (CA).
Find a financial adviser
Check out the Australian Securities and Investments Commission’s website MoneySmart – it has loads of great information about obtaining personal financial advice and finding a qualified financial adviser. Experts often suggest you find an adviser who charges by the hour instead of receiving a commission.
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