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List of indirect costs when buying a property
Just wondering if there is a list of typical indirect costs when purchasing a property anywhereon here? I've had a look but couldn't find what i was after. I'm referring to costs outside the actual purchase price and direct renovation costs. Things like LIM reports, building inspections, lawyers, etc.
Even if the list doesn't have the costs it would be good to see a complete list of things that need to be done along the same vein.
Is there one premade or would people care to make some suggestions?
Prices tend to vary wildly, you get what you pay for comes to mind (excepting anything to do with councils lol) but here's my 2c based on what I've experienced.
LIM's $150-$300 depending on the local authority.
Build Reports $350+....sky is the limit when weathertightness is concerned.
Lawyers/Conveyancing $700-$1500 or more if multiple titles/more complicated.
Mortgage/rates/insurance/electricity/water whilst renovating.
Your own time - would you be better doing overtime at your hourly rate and pay a tradesman to do the same job better and faster?***(not always the case)
Lost opportunity cost.
Trademe/advertisement/PM if you intend to let.
Simmo covered it really well.
Electrical Report for pre 1945 homes(a must for insurance) - ~$150
Rates, local and regional: although mentioned I can explain a bit further. When you purchase you will have to reimburse the previous owner a proportion of the rates they have paid already. Depending on the property and how far through the billing cycle you are, this could be very little, up to a few thousand.
Further Specialist Reports: Such as Earthquaking on larger buildings, especially with commercial uses(good example, dairy with dwelling). $150+ (sky the limit!)
BONDS: Things such as power companies, internet companies, gas companies etc etc, will require bonds when you signup.
I'll see if I can think of anything else obscure.
The Bank might charge you a set-up cost for the mortgage (circa $300) - this is often waived on specials / investors with a number of loans with the same Bank.
Yeah, you should normally ALWAYS be able to negotiate this off. Whenever a purchaser tells me above their bank's deal, they always say it got waived.
Originally Posted by LondonKiwi
HOWEVER, you did remind me of:
Low Equity Fee: This is a fee when your deposit is sub 15-20%. It is charged by the bank on lending and is generally around the $2000 mark but varies on loan size and bank. You are however able to just add this to the loan. It can be negotiated, but hard to get rid of it all.
Ask your bank to cover some of these costs when you are finalizing the loan. Or get a good mortgage broker if you are too shy to ask.
Late last year I switched a mortgage on a Home and Income from NZ Home Loans to ANZ. My mortgage broker negotiated a $2,000 cash contribution from ANZ to cover legal procedures.
This month I purchased a multiple income property and ANZ gave me a $3,000 cash contribution to cover legal and 1 year worth of insurance.
* Buy as much 8%+ yielding property as you can
* Don't go broke
That depends on the point in the lending cycle that has been reached at the time you get the loan.
Originally Posted by LondonKiwi
If loans are difficult to get, the Bank will charge whatever they think that they can get away with - often several hundred dollars on a house purchase. Take it or leave it.
If Banks are flush (as is the case right now) then they will not only waive the bank fee but also give you some cash.
This 'cash gift' may be tied.
Late last year I bought a property with a loan from ANZ.
They offered me a $1000 bonus if I either took an ANZ credit card or insured the property through them.
Their insurance was at a considerably higher premium than my usual insurance company, but as it was still less than $1000 I took that, on the basis I was getting free insurance for a year.
When the year is up I will switch the insurance to my usual insurance company.
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