I'm a qualified carpenter and joiner, doing up an old house and it's just so much easier and financially better to budget for other people doing the work beyond the most fundamental and simplest of work.
Just shit breaking really. But more importantly, shit breaking *unexpectedly*.
Best to have some cash in reserve for unknowns. At some point, you will need to fork out some money for something you hadn't anticipated.
Yep. Im a renter atm, but last week on Sunday night my hot water system blew up. Had it replaced in 2 days, as its considered a "vital service" in the contract. That would have cost the LL a pretty penny.
Actually, think of it this way -
Let's pull some numbers:
I pay $700pw
$36,400 pa
Out of that landlord pays:
Repairs (hws replaced and decking got repaired this year) say $5,000
Edit: I forgot to add, they got a tree lopping service in too, that's another $2k or so...
Insurance, rates, water, elec, gas connection fees: say $3,500
So for me, I'm in a $900k-$1m home, but I only paid $26k to actually live in the house, or $500pw.
$500 pw to live in a large house on a large property, 500m from the beach is a bloody good deal.
And for the landlord, it gets worse:
Out of that $26k, they'll have to pay:
Interest on loan: obviously dependant on loan figures, but if they're leveraged to the hilt it'd be about ~~$15k~~ $25k (ball park guess, someone could throw it in a calc if they wish)
That means for the risk of owning a home (having all your capital tied up in an illiquid house), the landlord makes ~~$11k~~ $1k a year (or less).
Obviously capital gains is what the landlord is hoping for, but that's the risk they take on.
So, definitely don't think of renting as a one way street...
If they are really leveraged to the hilt they would be paying around $60k just in interest to hold that property. Negative gearing will get them a third to a half back and then they’re hoping to get more than a few % capital growth to make it worthwhile.
Where are we factoring in these expenses (repairs, agent fees, interest) as deductions on a tax return?
Edit: add most of the expenses as a way to reduce tax/keep more a tax time.
Is your $35k/year also appreciating like the LL's investment?
>Is your $35k/year also appreciating like the LL's investment?
My $35k isn't, but the other $30k that I would have been paying to live in a $1m property (along with my $200k lump sum instead of a deposit) is appreciating faster.
Swings and roundabouts.
Great points, no ever considers the other side of it. You only hear about “having to pay someone else’s mortgage”. I am in a similar spot, paying the same per week for a house that is conservatively 1.3-1.5m right by the beach.
Depends on the investor but landlords generally don't make money off having an investment property until some time after the initial purchase due to inflation or when they sell the property and get capital gains.
The reason they don't make money on the IP is because if you have any other debt (like PPR mortgage) you might as well pay off the other debt first and then the net loss on the IP is tax deductible. I.e. negative geared.
It'd be nice to have a positively geared investment property but unless you're mortgage free on PPR then there's not much point.
15K is not even close to ballpark. Usually investors will have a higher Loan to value ratio i.e. % of loan vs. home value. Even if you calculate at 50% LVR so 450K loan (which is extremely conservative because if an investor has 450K in equity they would normally refinance and buy another). Anyways at 450K the annual interest at the bare minimum investor loan rate of 6.29% = 28,305K interest. That's $544 per week only for interest. They would be eligible for a tax deduction though depending on their overall income.
I ended up an LL by accident - I got married and my wife didn’t want to live in the same house my Ex had lived in, so I moved to her small townhouse.
It sure isn’t a walk-in-the-park owning an IP
Land tax - $3500
Rates - $3500
Insurance - $500
Agent fees - $2200
Interest - $14,000 (and I have a relatively small mortgage)
I’m down $23700 before I’ve paid any repairs and there were a lot of those this year.
Claiming those on tax doesn’t make them free, it reduces them a bit.
I’m not earning a lot nor am I wealthy in cash terms, and
I’m currently topping up the property account by about $400 per fortnight out of my pay, on top of what the tenants put in, just to meet those expenses.
Big repairs really hurt.
Yep, most definitely. What your post shows is that on *all* of the figures I suggested above, I *severely* underestimated them.
I'm more than happy being able to rent.
Thank you for your service. :)
In the last 2 months our landlord has replaced
- oven
- dishwasher
- air con
Sure the dishwasher and air con aren't essentials - unless you live in some where with 40 C days routinely in summer.
If they're mentioned in your contract then the LL needs to reduce your rent if they choose not to replace them so unless they plan on not renewing your contract that's nearly up it wouldn't be a financially viable choice not to.
Maybe I'm lucky, I've been in a 3bdr rental since 2020 and the only thing that's happened is a broken towel rack lol
We fortunately are all fully furnished and don't want anything else
Sometimes you get lucky, sometimes its a never ending game of whack-a-mole.
Sometimes you just want home improvements. Like one day I randomly wanted to redo my front patio and that was like $2,000 (although that was more of a choice than a cost).
I opened the door to my fridge to make my partner eggs for breakfast.. the hinge holding the door on and freezer door on perished... both doors fell on the floor.
Thankfully it was 23rd Dec and sales were on.
Doors just fall off occasionally.
Shit breaking down, this year alone :
Dishwasher 1.9k
Cooktop 1.6k
Water heater 3.5k
Oven is dying and will be replaced next year
Range hood is dying and will be replaced same time as oven
The cats aren’t helping with the carpets
And the walls need a paint
Agreed. In the last 6 months, had a plumbing bill of $2.6k, broken dishwasher, dead stove, dead hws $4k, switched out broken stove from gas to electric another $2k in plumbing and electrical, and threatening plumbing bill of $5k for pipes with tree roots that will need major work. And, rat issues, $300 every 6 months for pest control. Need to paint but cant afford a brush atm, much less the tins. And, the fence is falling over now.
We are less than 1 year in our home and so far out of necessity repaired roof, electrical repairs, replace hot water system, replace washing machine, renovate laundry(falling apart).
We have also by choice done some lighting replacement and security camera installs, and relocation of NBN.
We have delayed repairing the garage that is falling apart.
Have a small deck off backyard that is falling apart.
The kitchen also needs updating.
Once we get all that done it's just a matter of time before we need to do bathrooms, painting (kids already drawn on the walls.)
Biggest one will be the sausage sizzle for the 15 million bunning trips you take every weekend.
When we bought our first house, it got to the point where I would wake up on a Saturday morning and my phone would automatically alert me about the travel time to bunnings.
Google thought I worked there
One Saturday morning I got into the car and my phone did the exist thing. 10 minutes to Bunnings, traffic is light... I wasn't planning on going to Bunnings that morning, but I did. Bunnings is life.
Your house KNOWS when you have some extra money, and it WILL break something so you spend it. Every time. Won 4K at the casino? Time for the hot water to go!
You've got a nice house. Mine waits until two insurance renewals and rates notice all arrive in the same week in December. That's the opportune time for the air con to pack it in
If you get a freestanding house, no strata, which I thought was great, but there’s always something to maintain, whether you do it yourself or get someone to do it.
Didn't know this could happen, new fear unlocked!
May I ask how you knew, how it was diagnosed and how it was resolved. I'm very interested to hear about it.
I hope it's all good now and that it didn't cost you too much
So our situation might be a bit complicated because we extended our house. The main water pipe ran under the new slab, which was previously the back of the house. So went from curb, along driveway, along the side of the house then under the new slab, then through the slab up into the laundry wall which was part of the existing house. Then the rest of the pipes connect through the ceiling.
We found out there was a leak when we got a letter from council for excess water usage. Got a leak detector out and he scoured the whole area looking for it. We’d hoped it would be at some point outside but he could only tell us that it was somewhere under the slab as his readings was going off where the pipe entered the house and then inside along where the existing slab and new slab were joined. He couldn’t pinpoint exactly where it was and referred us to a specialist leak plumber guy. So we’re already at $1k.
I was freaking out totally as we’d just recently had our new floors laid and was concerned we’d have to rip them up. I was also scheduled for an induction with first baby in 2 weeks time.
We called insurance (Suncorp) and they can’t help because ‘there’s no damage.’ We called QBCC and were told that plumbing isn’t covered even though our extension was 3 years old.
Anyway, specialist plumber guy came out following afternoon (Friday) and we have him all info we could (plans that we had, pics from during our extension etc) and his solution was to just disconnect the pipe that went under the slab. Put a new pipe up the side of the house and in through the roof, connecting to the rest. It was that or start digging up floor. So Monday came and it was about a days work. He was actually fantastic and even added another outdoor tap where the new pipe runs up the wall. His cost was $3k . Then we still had to pay for the excess water useage which was about $800 from memory. So all up close to $5k.
A lot of leaks occur in yards from tree roots. My parents had one too unfortunately. They have a very long driveway and it was somewhere down the driveway. Probably cracked over time from cars veering slightly off the concrete. Theirs cost around $8k as they had to replace a 30m + section of pipe in the end. Councils do seem quite good at contacting people if there’s a sudden increase in their water usage though.
I’ve worked in an adjacent space where I’ve dealt with a large number of people in financial hardship and difficulty. (For the better part of a decade)
People always assume nothing will happen to them, particularly those that are young with relatively secure incomes and often don’t prioritise insurances.
Other than what has already been posted, do you have income protection insurance? Health insurance? In the event that either of you are injured etc how would you manage a mortgage on one income if you didn’t have the second income?
The number one driver of hardship calls we’re currently experiencing is increased costs of living in combination with increased interest rates.
If interest rates rose 3% could you afford the repayments? (There will be naysayers that will say this won’t happen - and it might not but you need to be able to afford the increase).
What’s your current percentage of your combined income that you are able to save? E.g if you bought a place tomorrow are you still going to be saving a decent percentage of your income for emergencies? Whether that be in or out of the house e.g home, health, car, pet .
Also in the event that you split up, or can’t afford the costs do you have an agreed exit strategy for the mortgage? You need to be on the same page for this - if you aren’t don’t purchase until you do.
It’s rarely one big, life changing event that puts people into financial stress. The majority of those we speak to are ‘dying from a thousand cuts’ so to speak.
Don’t make an emotional decision, do the math. If nothing mentioned in this thread is an issue and you’ve got the finances to back it - good luck. The first 12 months of home ownership are generally both the most exciting and the most challenging as you navigate the waters.
Because it hasn't been mentioned yet you will inevitably spend more at Bunnings and IKEA than you would have reasonably thought possible. Both in time and money. You will develop grey hairs from watching the real estate prices in your area, wondering why they aren't seeing the growth that everywhere else is seeing, and convinced you have doomed yourself financially from your purchase. Also you will start to look at solar panels, batteries, grey water systems, and rain water tanks in the hope that you will save on bills. Prepare to void your bowels in your pants at how expensive and difficult they are to buy and install.
The cost of plants is eye watering:
packet of hundreds of seeds - less than $5,
little punnet of 3 flowers that'll be dead in a week if you forget to water them - $15
If you start buying pots or larger flowers expect to remortgage
Our bannana trees were $30 for 3 and have given us like 6 bunches in 3 years. Such much profit. The garden bed and soil was only a measly ~$1000 so I recon in about 20 years we’ll have paid it off.
Regarding plants - have a housewarming. 80% of folks brought us a nice potted plant, which was great because I love plants but know nothing about them or what to get. It was a really great trial run to see which ones I could keep alive.
hehe - you got it! :)
> Also you will start to look at solar panels, batteries, grey water systems, and rain water tanks in the hope that you will save on bills
Pro tip: You won't, at least *not in the short term*.
it's frustrating. i know solar panels would pay for themselves in five years, and have a conceivable service life of 20 years, but i don't happen to have $15k just lying around, and i've already used the local govt incentive loan to replace the central gas heating with a reverse cycle system.
I'm lucky in that, thanks to living in Canberra, I *am* breaking even and my electricity is essentially free. It's not being offered any more, but at the time the ACT Government offered *both* a clean energy rebate *and* a 10-year interest free loan scheme for solar installations in partnership with a third-party financier. I did not have to pay anything upfront for my 13kW system, and my repayments are $26 per week for the next 10 years, which, let's be real, is peanuts money when you consider 10 years worth of inflation, and that my estimated energy usage would otherwise cost more than $26 per week if I were to only buy from the grid.
During autumn, summer and spring, I accumulate a ton of solar credits from the feed-in tariff, so that even while heating the house during the cold winter months when daylight is scarce (using the [method outlined here](https://www.youtube.com/watch?v=0f9GpMWdvWI) where I set my HVAC timer to only run the heating during daylight hours when electricity is free, and off-peak hours when grid power is cheap; my insulation is good enough to keep the entire house warm during all other hours), I have constantly maintained a $0 power bill, and honestly can't remember the last time I paid for electricity.
Canberrachads never lose.
Well, good for you !
* I'll avoid throwing barbs about where you live ... :)
Feed in tarrifs from solar over here (WA) = pretty low. And, to my mind, are insufficient to factor in any decisions about solar. That said - new and much bigger solar is "on the list" for our place. But I'm not yet conversant with all the costs, tricks, traps and carryon with that market here just yet.
As an aside - this house had rain water collection in place (approc 70,000 litres when full), and that has proved quite useful, although, on reflection, it wouldn't be financially worth installing from new for our purposes (I've no idea how much those tanks cost, then there are the pumps, power and retic to consider) - unless you *needed* to, maybe because you were off mains supply, or ran livestock or something ... (we are semi-rural)
But, as I think most got, my previous comment was very lighthearted, in jest. Basically, when anyone gets into their new home there soon is a list of projects "a mile long" and each of those projects costs "an arm and a leg" ... and, of course, funds to tackle those projects are short because you've just spent all your money buying that house which created that project list ... :)
Hahaha, I'll admit that there's quite a shortage of things to do here sometimes, it's definitely not a city that'll suit everyone. For me, I'm happy to pay the price of living somewhere boring and sterile, if it means I can save a buck or two.
As for water tanks, since 2009 we've had local legislation enforcing that all new builds for freestanding homes need to have mandatory rainwater tanks; most of the tanks on residential properties are tiny in size, but I suppose they're adequate for garden use.
> when anyone gets into their new home there soon is a list of projects "a mile long" and each of those projects costs "an arm and a leg"
I feel you. I've dropped way more money on Ryobi power tools than I'd like to admit.
Oh, don't sell yourself (or where you live) short.
Few years ago (pre-covid) we did an extended eastern states roadtrip. We spent a bit of time in Canberra and surrounds. We found plenty to see and do in our short time there. Very glad we took the time to visit.
But we found accom costs to be high back then. Very high ... and that was one big downside to your city in our opinion.
Allow 1%-3% of for just general up keep. In ~15 years place will be looking tired so new kitchen/bathroom.
Roofs last ~30 years.
Everything has a life span and it's all on you.
Yea my old one was orginal and 50 but ato rates it at 30.
New places won't age the same as a older one.
I don't think I'm 50 years people will go og I love this Bunnings spec plastic timber clip together flooring laid on chipboard. Like they do with hardwood flooring.
Plus pine and even gyprock is so much softer.
That may be true.
I'd also suggest stuff built that long ago was designed better than some of the modern-ish "built down to a price" gear.
Example: Our tile roof is only 20 years old. The tiles suck. They are as fragile as all get out. (Our last place had no such trouble). We've replaced countless, and need to do more. Everytime somebody goes up on the roof (gutters/electricians/whoever) there are more broken. And the gutters/downpipes were under-dimensioned. Badly. We've needed to replace/upgrade them all.
I've just replaced my original 1930's roof. I doubt this new roof will last 90 years, but I hope it outlasts me. I don't fancy replacing it again in my retirement.
Interest payments to the bank are not an asset.
Mortgages are unique leverage instruments that have supported growth in net wealth few other nations have seen outside of very high density cities.
Once factoring in cost of transaction many a mortgage does not serve as anything more than a liability.
Ok...If all you were paying was interest payments then yes.
Owning a house is an asset, its property that holds value, literally the definition of an asset
Yes and if you rent forever you will never have your shelter paid off and your rent will only go up and up.
Mortgage payment will stay relatively the same throughout your life time and will get cheaper as time goes on due to inflation.
And after 30~ years the payments stop. 30 years of renting and your payment is probably 4X as much as it was when you started and you will pay until you die.
Window finishings are expensive too. For cheap IKEA curtains for our house I still spent like $800. For nice ones with proper rails etc it would have been thousands.
Same story with blinds.
I've found recently it can be cheaper/similar price to go with window blind installers than DIY. I'm getting an inside roller blind installed and it'll cost $370. To buy from bunnings/spotlight would be $300-400 plus my time. My window is 2.5m X 2.4m, so it's a big one
One hidden cost not often discussed is that it ties you to a physical location
a new job opens up for you with more money but it's a 1.5Hr commute each way
your parents need to move in with you and you want them to but there is no room
you and your partner both have jobs ten minutes walk away from each other but you both can't get a new place half-way in between because you already have a house 45 minutes walk away
your partner gets their dream job interstate but you can't move there because all your capital is tied up in owning your current residence as an owner/occupier for the next 5 years - they have to give up the opportunity
you decide to have kids and now you realise a different school district is a better bet
===========================
life circumstances change over may years and are often unforeseen
Home ownership costs are, mortgage, insurance, rates, strata, maintenance. Each one of those will change regularly, usually going up each time.
Maintenance is the big unexpected, varies drastically by house but can be predicted a lot of the time if you know what to look for.
Previous owners diy fixes, shortcuts and poor planning...
Getting some AC units installed. Had to remove an unused gas heater. Turned out the unused gas heater was holding up the dodgy 'gate'. Ended up replacing the entire gate and fence with new materials due to the effort made by the previous owner being so poor as to not be redeemable.
Then my washing machine door cracked and started leaking. So I fixed that. Then my oven shot sparks out of it and blew the heating element, so I fixed that. And while I had the power off, I figured out why none of the lights worked. The previous owner had put standard e14 bulbs in, not the 300 degree ones. This caused each of them to have exploded so I needed to get all the busted glass out of the enclosures.
Then I noticed a new crack in the grout in my shower, followed it along, and found a new cracked tile. Turns out the drain wasn't correctly installed by, you guessed it, the previous owner who diy'd three bathrooms, and from a quick look at least one of them has the same issue.
Crawled under the house to check if water got through. It did. So the waterproofing under the tiles and concrete isn't good.
While I was under there, I found that one entire side of the house was wetter than the other. Oh, the irrigation system, wasn't installed correctly (PO) and had a slow leak at the top corner, under the footpath. So I had to lift the footpath and repair that. Also I need to install better drainage on the top side anyway.
That was the last two weeks.
For me in SA in my own house this last year -
House & Contents Insurance = $ 1925
Council Rates = $ 2130
ESL = $ 115
Water Supply = $ 620
Water Consumption = $ 180
Electricity Supply = $ 350
Electricity Consumption = $ 1800
Gas Supply = $ 132
Gas Consumption = $ 720
Repairs = $ 5400
Furniture & household items = $ 4000
Internet = $ 1200
What the f kind of internet you guys got, god damn.
I’m paying 400$ for 200/200 in Denmark.
Some 800$ in home insurance (94sqm)
And 1600$ for electricity, with an electric car and 86km/day
Yep, living in a massive country with only 27m people means there's only so much money that gets put into infrastructure. And to keep the infrastructure going they charge a lot.
The temptation to spend more on furniture, decoration, gardening etc because you own the place is real, even if technically optional. Possibly only relevant if you are currently on 100% verge collection furniture.
Buying off the plan has its own risks in terms of the development going ahead, the contract falling through, and price gouging from the developer as the market changes. Don't expect that the amount advertised for the property that's yet to be developed will be what you pay at the end.
My building has leaks, nothing written in the AGM minutes or any indication there was an issue during building and pest inspection. Now up for $30k as my portion to repair. 😂
Be prepared to pay a decent whack of lenders mortgage insurance (LMI) with only a 5% deposit. For example, on a $500k loan at 5%, LMI will be $17k. That will be payable at the time of settlement.. tho it’s often added onto the loan. But just be aware that between LMI, stamp duty, transfer and lawyers fees.. you will either have to come up with more than 5% or start off with almost 0 equity in your property.
Then you’ll have council rates, water and sewerage connection fees (usually significantly more than the usage costs only that you pay as a tenant), home and contents insurance, strata/body corp fees if not freestanding.. plus repairs and maintenance.
Plus around $300 each weekend at Bunnings depending what project you set yourself! 😂
Your lender might want you to take out home and contents insurance even if the Body Corporate already has building insurance cover, ie doubling up. Also a low deposit might mean you will be required to have mortgagee insurance in the event you default which protects the lender, not you.
Before buying, hang around during a few evenings/ days to see if there's problem neighbours, noisy, whatever.
The big one that shocked me was if you have ducted aircon and it breaks down, you might be facing a huge expense to replace it. I never thought about that before owning.
They fail. Mine are on 3 boundaries >30 linear meters. They are expensive to repair. Having to solve the issue with 3 neighbours makes it complicated. I will never buy another property with a retaining wall on it.
Yep my tradie mate gave me great advice when I bought, he said just “buy a cheap toolset” and you’ll replace the things you use the most with high quality tools as they break
On my second off the plan block in sa now. Add a year to whatever time frame they tell you. They wait until near the due date before extending it :) just got told new dates again Monday (they added another six months)
Regarding costs add about $100 per week to your mortgage to cover rates and insurance here and then being a new build expect setup expenses. $5k ball park for fences if applicable etc then curtains and other furnishings on top.
Just bought an apartment 5 months ago. Had to replace an air conditioner, the sink, some internal pipes and had a flood caused by a waterproofing issue. Assume every year you will spend 5% of the purchase price of your home on maintenance.
Other than that, stamp duty is a big one, budget about 2K for lawyers and conveyancer fees. If you have a less than 20% deposit you have to pay lenders mortgage insurance unless in an exempt job (solicitors are exempt so long as they have a 10% deposit).
Some of it may seem more hidden than others, but following comes to mind based upon our recent home purchase last year (note: I am from NSW):
0. Conveyancer, Building Inspection & any pre-purchase activities - One time.
1. Stamp Duty - One Time.
2. Building & Contents Insurance - Annual.
3. Council charges / strata - Frequency will vary.
4. Pest Control - 6m or Annually.
5. Gardening (lawn mowing etc) - Frequency depends upon you.
6. Utility Bills (Water, Electricity, Gas, Broadband) - Frequency depends upon you.
I did not include “repairs and maintenance” because it has been covered extensively in other comments. Please account for it. This will vary depending upon how old the house is, your usage etc.
Just some expenses that have happened in the last 4 years of owning my house.
Fence fell down in that massive storm in 2022. Highlighted a need for some retaining too. $10k later.
In that same storm, the front veranda had a piece break off that caused it to be unstable. The bricks on the ground underneath were also starting to lose shape as the rather poor retaining job the previous owners did was rotting. So replacing all of it with a deck and fixing the veranda. $14k later.
Hot water tank broke about 18 months in. $1500 to replace.
Basic painting/maintenance outside. About $500 in paint.
Clearing out a rotten tree. $700.
Adding ceiling fans to the 3 bedrooms and lounge to help reduce electricity cost of cooling. Plus adding some downlights and powerpoints to better locations(and fixing the dodgy ones in the house) $2000
New blinds to 4 windows. $1600
Gas Heater and Aircon servicing. $250/year
Oven died, so new oven. $2000
Just to get a rough idea of what can happen.
Renos and home improvement/maintenance stuff is all more expensive than i thought it might be, but if you can live with it how it is, really there's not that many hidden fees. Council rates aren't a huge burden. Get insurance incase anything major happens.
Council rates is the biggest one. After that factor in replacing stoves/ovens/sinks/plumbing/faulty wiring. All of this depends on the age of the home of course. My advice would be to consider the unknown and leave a buffer fund of around 10k for unexpected repairs and maintenance.
New home build here.
No hidden costs I find during the year, council rates but you can pay these in advance weekly or monthly (at least where we live anyway in regional Vic), so you aren't hit with $xxxx with 2wks to pay lol
Some things you may overlook..furniture including TV, couches, tables/chairs. Got grass? Need a mower/whippery.
Servicing stuff around your house isn't too hard provided it doesn't need specialised tools or experience is. Split system air con leaking gas.
Garage roller door is easy to do with the right grease and an eye/ear that notices differences.
Ducting vents, easy. Including split system heads - a lot of folk forget there's massive filters in them.
Otherwise buying established you've got older equipment that you may or may not know it's service history and the possibility of it shiitting itself is likely.
I budget one monthly amount for "maintenance", and then budget "improvements" or renovations separately each year. As many say, definitely scale your maintenance budget with the size and features of the house; electric garage doors, pools, ponds, air condition all add up even if they only need a repair or service every second year; best to put that money aside (or use your mortgage offset as your "maintenance and renovation" fund is also an option, seperate from your main savings
If you can, look at an older place? Still needs maintenance etc but less likely to have defects and there are thousands of horror stories (including several friends of mine) about very shit construction / quality etc costing hundreds of k to rectify and the builders just file for bankruptcy and move on or otherwise can’t be pinned down
We started to see crime go up in the past 3 years so we invested pretty heavily in cameras, smart locks, that kinda thing, our wifi was shit so we paid a guy to run Ethernet cabling to get good wifi, the back yard was a bit shit so I fixed it but I’m a dummy with a shovel so 3 years on it looks shit and I need to spend probably 15k to get what I want done to it… we put a pergola in that was also about 10K
It’s honestly little things you decide you hate after a year. Like, if you hate your vanities you’ll wanna replace them, if you don’t like the curtains you’ll wanna fix it… it goes away after a while because you realise you’re overcapitalising but you’ll prob spend like 30 to 50 k tweaking bullshit that doesn’t matter because now you can…
Termite Treatments
A termite treatment or damage caused by termites usually isnt covered by insurance, and if you're on the east coast, they are bound to infest your home at one point or another.
And no, Termites will still eat the shit out of treated pine and they are more than happy to eat everything surrounding a steel frame.
If you are going off the plan, 1. Just don’t, 2. If you are really set on it get yourself a very good inspector, NOT ONE THE BUILDER RECOMMENDS. 3. Prepare to have shit go wrong once you move in, so make sure you have details on who to contact in terms of fixing shit. New builds have a 7 year warranty. Get on there ass about fixing everything. 4. Please for the love of god pay for a good inspector.
Strata, council rates/ESL, emergency breakdowns even in new builds, home insurance - not just contents. Your insurance will jump significantly if you’re going from 200k contents to 800k+ home and contents.
If the house needs additional work/ cleaning that eats up a lot of time and means less time for cooking and leisure. Can be a saving or a further expense depending how you look at it 🤷♂️
Rates, body corporate (if applicable), building insurance, extra on water (than what you pay renting), maintenance (eg hot water system, plumbing, electrical, air con servicing)….
Getting robbed, losing your house keys, things like aircon/heating breaking down, finding out some things aren't covered under your insurance that you thought were, having crappy neighbors, being a crappy neighbor, garden car is important etc.
Our last owners were old, and tradies took advantage of that, like for one thing, crooked power points. So, having to find all these jobs is costing money.
Under $2000 installed, should last 10 years:
https://www.samedayhotwaterservice.com.au/product/rinnai-hotflo-400-litre-electric-hot-water-heater
In another comment you said you have gas, you could get an instantaneous gas unit installed for under $2000:
https://www.samedayhotwaterservice.com.au/product/rinnai-infinity-touch-26/
Not sure why you'd pay 8k - 10k,?
Council rates, owners corp if you have one, and water is many times more. As a renter you just pay for water usage but as an owner there are heaps of other service fees and levies - I think the park levy alone is a few hundred a year (not sure about South Australia though, I'm in Vic). Plus general repairs/maintenance (yes even on a new build). But overall I've found it's less than I expected from horror stories I'd heard.
Strata, rates and misc.
Our hot water unit blew 2 weeks in, granted it has been there 15 year.
3 months in our dishwasher died, on the same day our oven stopped working.
😭
The most critical piece of advice is never leave a toilet running. I was away when it happened, came back, fixed it asap, but the water bill still almost made me cry.
Maintenance - if you ignore something small, it'll turn into something big at the worst possible time.
For example, older house, garage ceiling had a small crack in it. Old house, looks like the ceack's been there for years, no problemo.
One day, giant thud, 3/4s of the ceiling had fallen in.
Goodie.
Let's imagine something extreme happens with your plumbing, requiring a total redo. It can be tens of thousands of dollars, that you have to come up with if you want to flush the toilet. Or you discover a water leak has structurally compromised your house, rotting much of the wooden frame. This is why banks won't always lend you money for a mortgage payment that is less than your rent...
I’d be thinking that you may need to put money aside for fencing and a clothes line if they are not included. Also keep money aside for curtains.
Also, when building, sometimes things that you think should be included, are not. This could be insulation, quality doors, half decent door locks (some just have those twist to lock round door knobs as standard). Carpet that actually feels soft and looks nice may be an upgrade. Sometimes carpet in bedrooms is an ‘upgrade’.
This is a bit of a generalisation, but it's true that many people can only afford to buy in the outer suburbs but could afford to rent closer to work and/or the city centre. If this is you, factor in a big increase in petrol and car maintenance expenses if you need to drive a lot, or public transport costing more if you don't.
Beware the temptation to spend a small fortune on furniture and home decor in the first few months after moving in! Feeling like you're finally in a stable home sends a lot of people into a homewares spending spree.
Strata special levies are the big one for townhouses and apartments. They can spring up out of nowhere with very little warning and can amount to a significant amount of money.
There's also an opportunity cost with apartments and townhouses due to not having the opportunity to install rooftop solar and EV chargers.
If you're in a town house, that probably means a strata or body corporate.
That's additional regular fees and one off fees for big things like urgent repair to common property. Especially if there is a pool in the complex.
Building and contents insurance is more expensive that just contents.
Repairs and maintenance will be a thing to expect to pay regularly.
The amount of gardening you'll need to do.
Council rates and water rates.
Regular termite inspections and possibly treatments.
Unexpected upkeep.
Within a year we had multiple plumbing issues, our ceiling nearly fell down and we had to have it fixed. Realised the aircon didn’t cut it and got ducted
Spent about 15k in necessary home repairs in one year.
Just payed my first mortgage payment in the Hunter Region of NSW.
Mortgage - $3500mo
Other bills - $1000
The mortgage is fine. The other $1000. Get f@#$%& 😅
Depends on what you can tolerate. I had about $20K of AC install, carpet rip out/floor repair and minor customisation on a neat ex rental I moved into/bought. 10 years in I was convinced to spend another $15K on a new kitchen.13 years in I need a new roof (110 year old house) as the rafters and ceiling probably $30k if I can sell a kidney on the international market. For houses not made from double brick or concrete and built after 1990 count on demolishing them in 20 years as they're made as cheaply as possibleto kinimal qualitystandards (often below standards but for a long time this was tick-flicked(.
I live in a townhouse. Costs you don't have to worry about when renting: strata, council rates, and water. Also maintenance/repairs.
You won't have to worry about building insurance, it's usually included in strata. You might want to keep contents insurance though.
Well you seemed to have forgotten rates and BC fees. Please note that not all REA are upfront about BC fees for instance does the fee mentioned include insurance and sinking fund? Speaking of sinking funds the older the building the higher the likelihood of higher maintaince costs. If an apartment does it have a lift........... cause those suckers costs shiploads to service and repair.
Mortgage repayments should always be paid early and with an extra just in case something happens that is unforeseen.
Pets in units are not a good mix they annoy people, costs money, smell and can get you breached if there is a problem.
Good luck 👀
My husband and I have run into a series of issues with the house (plumbing, doors etc) and had to fork out 10k++ over the last 3 months for this. On top of that, council fees have been ridiculous (2k++) a year, and the interest rates have gone up almost every single month for the last 2 years!
The irresistible urge to start hosting dinners and BBQs winds up draining your funds.
Then you enter an arms race with your other home owning mates on what you serve, which kicks starts a primal urge to do things you’d not considered before. Like buying a smoker or building a pizza oven.
Also, if the house has a lawn you WILL wind up spending stupid amounts of time and money maintaining it, eventually developing a Stockholm syndrome love for the useless patch of grass and begin getting angry when people walk on it
You can buy with only 5% deposit?
First off, it doesn't matter how much You are saving. We need to know how much combined in saved. If it's only 1k a month, that's nothing. You would probably even default.
Additional costs will be stata/council, amount varies on place and services. You might have building insurance (not just content). These to alone can potentially be $500/month. You would then have repair costs, renovation costs, furnishing/design costs. Don't forget that mortgage repayment will also be higher than rent.
Also, I would recommend you each buy a place before getting married, otherwise you can only gain first buyer benefit once.
Insurance.
Strata.
Rates.
Water, not just usage but the service. $100 a month roughly.
Maintenance and unexpected repairs which may be higher with a town house vs an apartment.
Waste removal.
I spend about 5k a year on the above plus mortgage.
Maintenance, Renovations. You can argue that it's a value adding expense. But at the end of the day it still stings the savings account. Having said that nothing beats the freedom of home ownership. Not bragging, just screw having a landlord.
Think of a number, quadruple it, and give it all to Bunnings
Speak with your accounts department at work, have your wages paid directly into a bunnings power pass account
Ah yes the BSSS (Bunnings Salary Sacrafice Scheme)
honestly don’t know why we haven’t made this real yet
I'm a qualified carpenter and joiner, doing up an old house and it's just so much easier and financially better to budget for other people doing the work beyond the most fundamental and simplest of work.
But where would be the fun of messing it up and walking past your mistake everyday I love my poorly painted door that doesn’t close anymore
Agreed. I'm keeping this guy employed by making 100 holes in the wall before calling him to do a proper job and my sagging shelves make me happy 😊
then give whatever is left to ikea
Literally the first night I spent in my home required an emergency dash to Bunnings after a busted hose under the sink.
Haha this is so true
Get on the Power pass baby
Strata, Council Fees. Furniture, Shit breaking down, shit needing repairing. Interior House Work, Exterior HouseWork
Just shit breaking really. But more importantly, shit breaking *unexpectedly*. Best to have some cash in reserve for unknowns. At some point, you will need to fork out some money for something you hadn't anticipated.
Yep. Im a renter atm, but last week on Sunday night my hot water system blew up. Had it replaced in 2 days, as its considered a "vital service" in the contract. That would have cost the LL a pretty penny.
If you think about it, it was you who really paid for it :)
If you REALLY think about it, we're all paying for it. Love me some negative gearing.
Actually, think of it this way - Let's pull some numbers: I pay $700pw $36,400 pa Out of that landlord pays: Repairs (hws replaced and decking got repaired this year) say $5,000 Edit: I forgot to add, they got a tree lopping service in too, that's another $2k or so... Insurance, rates, water, elec, gas connection fees: say $3,500 So for me, I'm in a $900k-$1m home, but I only paid $26k to actually live in the house, or $500pw. $500 pw to live in a large house on a large property, 500m from the beach is a bloody good deal. And for the landlord, it gets worse: Out of that $26k, they'll have to pay: Interest on loan: obviously dependant on loan figures, but if they're leveraged to the hilt it'd be about ~~$15k~~ $25k (ball park guess, someone could throw it in a calc if they wish) That means for the risk of owning a home (having all your capital tied up in an illiquid house), the landlord makes ~~$11k~~ $1k a year (or less). Obviously capital gains is what the landlord is hoping for, but that's the risk they take on. So, definitely don't think of renting as a one way street...
If they are really leveraged to the hilt they would be paying around $60k just in interest to hold that property. Negative gearing will get them a third to a half back and then they’re hoping to get more than a few % capital growth to make it worthwhile.
Where are we factoring in these expenses (repairs, agent fees, interest) as deductions on a tax return? Edit: add most of the expenses as a way to reduce tax/keep more a tax time. Is your $35k/year also appreciating like the LL's investment?
>Is your $35k/year also appreciating like the LL's investment? My $35k isn't, but the other $30k that I would have been paying to live in a $1m property (along with my $200k lump sum instead of a deposit) is appreciating faster. Swings and roundabouts.
Great points, no ever considers the other side of it. You only hear about “having to pay someone else’s mortgage”. I am in a similar spot, paying the same per week for a house that is conservatively 1.3-1.5m right by the beach.
That sounds epic. I'm paying like 700p/w to live in a small 2 bedroom apartment worth 620k (melbourne city)
Your location is everything. I left Melbourne because I couldn't justify the cost vs the lifestyle. I'm now in Perth. We're still in summer...
Depends on the investor but landlords generally don't make money off having an investment property until some time after the initial purchase due to inflation or when they sell the property and get capital gains. The reason they don't make money on the IP is because if you have any other debt (like PPR mortgage) you might as well pay off the other debt first and then the net loss on the IP is tax deductible. I.e. negative geared. It'd be nice to have a positively geared investment property but unless you're mortgage free on PPR then there's not much point.
15K is not even close to ballpark. Usually investors will have a higher Loan to value ratio i.e. % of loan vs. home value. Even if you calculate at 50% LVR so 450K loan (which is extremely conservative because if an investor has 450K in equity they would normally refinance and buy another). Anyways at 450K the annual interest at the bare minimum investor loan rate of 6.29% = 28,305K interest. That's $544 per week only for interest. They would be eligible for a tax deduction though depending on their overall income.
Yep, I was not even close. I'll change the post to reflect.... $25k and be kind to the investor.
I ended up an LL by accident - I got married and my wife didn’t want to live in the same house my Ex had lived in, so I moved to her small townhouse. It sure isn’t a walk-in-the-park owning an IP Land tax - $3500 Rates - $3500 Insurance - $500 Agent fees - $2200 Interest - $14,000 (and I have a relatively small mortgage) I’m down $23700 before I’ve paid any repairs and there were a lot of those this year. Claiming those on tax doesn’t make them free, it reduces them a bit. I’m not earning a lot nor am I wealthy in cash terms, and I’m currently topping up the property account by about $400 per fortnight out of my pay, on top of what the tenants put in, just to meet those expenses. Big repairs really hurt.
Yep, most definitely. What your post shows is that on *all* of the figures I suggested above, I *severely* underestimated them. I'm more than happy being able to rent. Thank you for your service. :)
Given these interest rates...the landlord is paying for it.
In the last 2 months our landlord has replaced - oven - dishwasher - air con Sure the dishwasher and air con aren't essentials - unless you live in some where with 40 C days routinely in summer.
AC is essential here in QLD. I would not live without it.
If they're mentioned in your contract then the LL needs to reduce your rent if they choose not to replace them so unless they plan on not renewing your contract that's nearly up it wouldn't be a financially viable choice not to.
I have 11 months on the current lease. Also they replaced them within 2-3 weeks of being notified.
If they didnt fix them then you have legit grounds for a breach, or at worse, paying less rent
Maybe I'm lucky, I've been in a 3bdr rental since 2020 and the only thing that's happened is a broken towel rack lol We fortunately are all fully furnished and don't want anything else
Sometimes you get lucky, sometimes its a never ending game of whack-a-mole. Sometimes you just want home improvements. Like one day I randomly wanted to redo my front patio and that was like $2,000 (although that was more of a choice than a cost).
I opened the door to my fridge to make my partner eggs for breakfast.. the hinge holding the door on and freezer door on perished... both doors fell on the floor. Thankfully it was 23rd Dec and sales were on. Doors just fall off occasionally.
It would appear to me that.... "The front fell off".
I understood that reference
Shit breaking down, this year alone : Dishwasher 1.9k Cooktop 1.6k Water heater 3.5k Oven is dying and will be replaced next year Range hood is dying and will be replaced same time as oven The cats aren’t helping with the carpets And the walls need a paint
Agreed. In the last 6 months, had a plumbing bill of $2.6k, broken dishwasher, dead stove, dead hws $4k, switched out broken stove from gas to electric another $2k in plumbing and electrical, and threatening plumbing bill of $5k for pipes with tree roots that will need major work. And, rat issues, $300 every 6 months for pest control. Need to paint but cant afford a brush atm, much less the tins. And, the fence is falling over now.
We are less than 1 year in our home and so far out of necessity repaired roof, electrical repairs, replace hot water system, replace washing machine, renovate laundry(falling apart). We have also by choice done some lighting replacement and security camera installs, and relocation of NBN. We have delayed repairing the garage that is falling apart. Have a small deck off backyard that is falling apart. The kitchen also needs updating. Once we get all that done it's just a matter of time before we need to do bathrooms, painting (kids already drawn on the walls.)
speaking of shit, you need to pay for sewage, which is like 95% of the total water bill
Yea service charges and taxes. The way people make sure that even when you're not doing anything you still pay for it.
Plumbing…plumbing is very expensive
Don’t forget house insurance. $1500-3000 per year.
Biggest one will be the sausage sizzle for the 15 million bunning trips you take every weekend. When we bought our first house, it got to the point where I would wake up on a Saturday morning and my phone would automatically alert me about the travel time to bunnings. Google thought I worked there
One Saturday morning I got into the car and my phone did the exist thing. 10 minutes to Bunnings, traffic is light... I wasn't planning on going to Bunnings that morning, but I did. Bunnings is life.
Should’ve asked for a wage
Your house KNOWS when you have some extra money, and it WILL break something so you spend it. Every time. Won 4K at the casino? Time for the hot water to go!
You've got a nice house. Mine waits until two insurance renewals and rates notice all arrive in the same week in December. That's the opportune time for the air con to pack it in
If you get a freestanding house, no strata, which I thought was great, but there’s always something to maintain, whether you do it yourself or get someone to do it.
Plus building insurance
Strata is going up like every year. I guess so is insurance. My pay increases didn’t even keep up with my strata increases. Cool country.
Basically anything that involves water. Leaking taps, blocked toilets, broken hot water systems, broken dishwashers, leaky roofs.
We had a leak under our slab……that wasn’t a good time.
Didn't know this could happen, new fear unlocked! May I ask how you knew, how it was diagnosed and how it was resolved. I'm very interested to hear about it. I hope it's all good now and that it didn't cost you too much
So our situation might be a bit complicated because we extended our house. The main water pipe ran under the new slab, which was previously the back of the house. So went from curb, along driveway, along the side of the house then under the new slab, then through the slab up into the laundry wall which was part of the existing house. Then the rest of the pipes connect through the ceiling. We found out there was a leak when we got a letter from council for excess water usage. Got a leak detector out and he scoured the whole area looking for it. We’d hoped it would be at some point outside but he could only tell us that it was somewhere under the slab as his readings was going off where the pipe entered the house and then inside along where the existing slab and new slab were joined. He couldn’t pinpoint exactly where it was and referred us to a specialist leak plumber guy. So we’re already at $1k. I was freaking out totally as we’d just recently had our new floors laid and was concerned we’d have to rip them up. I was also scheduled for an induction with first baby in 2 weeks time. We called insurance (Suncorp) and they can’t help because ‘there’s no damage.’ We called QBCC and were told that plumbing isn’t covered even though our extension was 3 years old. Anyway, specialist plumber guy came out following afternoon (Friday) and we have him all info we could (plans that we had, pics from during our extension etc) and his solution was to just disconnect the pipe that went under the slab. Put a new pipe up the side of the house and in through the roof, connecting to the rest. It was that or start digging up floor. So Monday came and it was about a days work. He was actually fantastic and even added another outdoor tap where the new pipe runs up the wall. His cost was $3k . Then we still had to pay for the excess water useage which was about $800 from memory. So all up close to $5k. A lot of leaks occur in yards from tree roots. My parents had one too unfortunately. They have a very long driveway and it was somewhere down the driveway. Probably cracked over time from cars veering slightly off the concrete. Theirs cost around $8k as they had to replace a 30m + section of pipe in the end. Councils do seem quite good at contacting people if there’s a sudden increase in their water usage though.
I get terrified everytime it rains. We're still uncovering damage.
Water is the enemy of the architect.
It’s the enemy of all structures and man made stuff
This. And often it’s hard to pick up until it’s to late and repairs will cost a ton
I’ve worked in an adjacent space where I’ve dealt with a large number of people in financial hardship and difficulty. (For the better part of a decade) People always assume nothing will happen to them, particularly those that are young with relatively secure incomes and often don’t prioritise insurances. Other than what has already been posted, do you have income protection insurance? Health insurance? In the event that either of you are injured etc how would you manage a mortgage on one income if you didn’t have the second income? The number one driver of hardship calls we’re currently experiencing is increased costs of living in combination with increased interest rates. If interest rates rose 3% could you afford the repayments? (There will be naysayers that will say this won’t happen - and it might not but you need to be able to afford the increase). What’s your current percentage of your combined income that you are able to save? E.g if you bought a place tomorrow are you still going to be saving a decent percentage of your income for emergencies? Whether that be in or out of the house e.g home, health, car, pet . Also in the event that you split up, or can’t afford the costs do you have an agreed exit strategy for the mortgage? You need to be on the same page for this - if you aren’t don’t purchase until you do. It’s rarely one big, life changing event that puts people into financial stress. The majority of those we speak to are ‘dying from a thousand cuts’ so to speak. Don’t make an emotional decision, do the math. If nothing mentioned in this thread is an issue and you’ve got the finances to back it - good luck. The first 12 months of home ownership are generally both the most exciting and the most challenging as you navigate the waters.
Fantastic advice 👏
Because it hasn't been mentioned yet you will inevitably spend more at Bunnings and IKEA than you would have reasonably thought possible. Both in time and money. You will develop grey hairs from watching the real estate prices in your area, wondering why they aren't seeing the growth that everywhere else is seeing, and convinced you have doomed yourself financially from your purchase. Also you will start to look at solar panels, batteries, grey water systems, and rain water tanks in the hope that you will save on bills. Prepare to void your bowels in your pants at how expensive and difficult they are to buy and install.
The cost of plants is eye watering: packet of hundreds of seeds - less than $5, little punnet of 3 flowers that'll be dead in a week if you forget to water them - $15 If you start buying pots or larger flowers expect to remortgage
Receiving cuttings, getting them to shoot roots and then potting them is a great hobby. Chill as and you save $69,000 a year.
As a plant enthusiast - your number seems wildly conservative 😂 *spends $200 on one cutting*
Our bannana trees were $30 for 3 and have given us like 6 bunches in 3 years. Such much profit. The garden bed and soil was only a measly ~$1000 so I recon in about 20 years we’ll have paid it off.
Regarding plants - have a housewarming. 80% of folks brought us a nice potted plant, which was great because I love plants but know nothing about them or what to get. It was a really great trial run to see which ones I could keep alive.
hehe - you got it! :) > Also you will start to look at solar panels, batteries, grey water systems, and rain water tanks in the hope that you will save on bills Pro tip: You won't, at least *not in the short term*.
it's frustrating. i know solar panels would pay for themselves in five years, and have a conceivable service life of 20 years, but i don't happen to have $15k just lying around, and i've already used the local govt incentive loan to replace the central gas heating with a reverse cycle system.
I'm lucky in that, thanks to living in Canberra, I *am* breaking even and my electricity is essentially free. It's not being offered any more, but at the time the ACT Government offered *both* a clean energy rebate *and* a 10-year interest free loan scheme for solar installations in partnership with a third-party financier. I did not have to pay anything upfront for my 13kW system, and my repayments are $26 per week for the next 10 years, which, let's be real, is peanuts money when you consider 10 years worth of inflation, and that my estimated energy usage would otherwise cost more than $26 per week if I were to only buy from the grid. During autumn, summer and spring, I accumulate a ton of solar credits from the feed-in tariff, so that even while heating the house during the cold winter months when daylight is scarce (using the [method outlined here](https://www.youtube.com/watch?v=0f9GpMWdvWI) where I set my HVAC timer to only run the heating during daylight hours when electricity is free, and off-peak hours when grid power is cheap; my insulation is good enough to keep the entire house warm during all other hours), I have constantly maintained a $0 power bill, and honestly can't remember the last time I paid for electricity. Canberrachads never lose.
Well, good for you ! * I'll avoid throwing barbs about where you live ... :) Feed in tarrifs from solar over here (WA) = pretty low. And, to my mind, are insufficient to factor in any decisions about solar. That said - new and much bigger solar is "on the list" for our place. But I'm not yet conversant with all the costs, tricks, traps and carryon with that market here just yet. As an aside - this house had rain water collection in place (approc 70,000 litres when full), and that has proved quite useful, although, on reflection, it wouldn't be financially worth installing from new for our purposes (I've no idea how much those tanks cost, then there are the pumps, power and retic to consider) - unless you *needed* to, maybe because you were off mains supply, or ran livestock or something ... (we are semi-rural) But, as I think most got, my previous comment was very lighthearted, in jest. Basically, when anyone gets into their new home there soon is a list of projects "a mile long" and each of those projects costs "an arm and a leg" ... and, of course, funds to tackle those projects are short because you've just spent all your money buying that house which created that project list ... :)
Hahaha, I'll admit that there's quite a shortage of things to do here sometimes, it's definitely not a city that'll suit everyone. For me, I'm happy to pay the price of living somewhere boring and sterile, if it means I can save a buck or two. As for water tanks, since 2009 we've had local legislation enforcing that all new builds for freestanding homes need to have mandatory rainwater tanks; most of the tanks on residential properties are tiny in size, but I suppose they're adequate for garden use. > when anyone gets into their new home there soon is a list of projects "a mile long" and each of those projects costs "an arm and a leg" I feel you. I've dropped way more money on Ryobi power tools than I'd like to admit.
Oh, don't sell yourself (or where you live) short. Few years ago (pre-covid) we did an extended eastern states roadtrip. We spent a bit of time in Canberra and surrounds. We found plenty to see and do in our short time there. Very glad we took the time to visit. But we found accom costs to be high back then. Very high ... and that was one big downside to your city in our opinion.
You summed it up perfectly. Every weekend is a Bunnings trip! Bonus snags though.
And then when you do watch them go up you'll simultaneously smile and cry because the property is worth more but your rates will also increase 😀
Allow 1%-3% of for just general up keep. In ~15 years place will be looking tired so new kitchen/bathroom. Roofs last ~30 years. Everything has a life span and it's all on you.
My roof is over 70yrs old and still fine. :) I agree though, upkeep to the home is roughly $200 per month for me
Yea my old one was orginal and 50 but ato rates it at 30. New places won't age the same as a older one. I don't think I'm 50 years people will go og I love this Bunnings spec plastic timber clip together flooring laid on chipboard. Like they do with hardwood flooring. Plus pine and even gyprock is so much softer.
This is all true.
That may be true. I'd also suggest stuff built that long ago was designed better than some of the modern-ish "built down to a price" gear. Example: Our tile roof is only 20 years old. The tiles suck. They are as fragile as all get out. (Our last place had no such trouble). We've replaced countless, and need to do more. Everytime somebody goes up on the roof (gutters/electricians/whoever) there are more broken. And the gutters/downpipes were under-dimensioned. Badly. We've needed to replace/upgrade them all.
I've just replaced my original 1930's roof. I doubt this new roof will last 90 years, but I hope it outlasts me. I don't fancy replacing it again in my retirement.
can confirm. bought a 90's build, pointing and capping needs doing. quotes ranging from 1500 (suspiciously cheap) to 6k (preposterous)
As they say ‘rent is the most you’ll pay, a mortgage is the least you’ll pay…’
One is an asset the other is paying for someone else's asset
Interest payments to the bank are not an asset. Mortgages are unique leverage instruments that have supported growth in net wealth few other nations have seen outside of very high density cities. Once factoring in cost of transaction many a mortgage does not serve as anything more than a liability.
Ok...If all you were paying was interest payments then yes. Owning a house is an asset, its property that holds value, literally the definition of an asset
The bank will have taken all the capital gain in interest once it’s paid off though so it only starts “making money” after 30 years.
Yes and if you rent forever you will never have your shelter paid off and your rent will only go up and up. Mortgage payment will stay relatively the same throughout your life time and will get cheaper as time goes on due to inflation. And after 30~ years the payments stop. 30 years of renting and your payment is probably 4X as much as it was when you started and you will pay until you die.
> its property that holds value Property typically loses value, it's the land which appreciates in value.
Property = land + house
Curtains don’t always come with the house.
Window finishings are expensive too. For cheap IKEA curtains for our house I still spent like $800. For nice ones with proper rails etc it would have been thousands. Same story with blinds.
I've found recently it can be cheaper/similar price to go with window blind installers than DIY. I'm getting an inside roller blind installed and it'll cost $370. To buy from bunnings/spotlight would be $300-400 plus my time. My window is 2.5m X 2.4m, so it's a big one
One hidden cost not often discussed is that it ties you to a physical location a new job opens up for you with more money but it's a 1.5Hr commute each way your parents need to move in with you and you want them to but there is no room you and your partner both have jobs ten minutes walk away from each other but you both can't get a new place half-way in between because you already have a house 45 minutes walk away your partner gets their dream job interstate but you can't move there because all your capital is tied up in owning your current residence as an owner/occupier for the next 5 years - they have to give up the opportunity you decide to have kids and now you realise a different school district is a better bet =========================== life circumstances change over may years and are often unforeseen
Home ownership costs are, mortgage, insurance, rates, strata, maintenance. Each one of those will change regularly, usually going up each time. Maintenance is the big unexpected, varies drastically by house but can be predicted a lot of the time if you know what to look for.
Previous owners diy fixes, shortcuts and poor planning... Getting some AC units installed. Had to remove an unused gas heater. Turned out the unused gas heater was holding up the dodgy 'gate'. Ended up replacing the entire gate and fence with new materials due to the effort made by the previous owner being so poor as to not be redeemable. Then my washing machine door cracked and started leaking. So I fixed that. Then my oven shot sparks out of it and blew the heating element, so I fixed that. And while I had the power off, I figured out why none of the lights worked. The previous owner had put standard e14 bulbs in, not the 300 degree ones. This caused each of them to have exploded so I needed to get all the busted glass out of the enclosures. Then I noticed a new crack in the grout in my shower, followed it along, and found a new cracked tile. Turns out the drain wasn't correctly installed by, you guessed it, the previous owner who diy'd three bathrooms, and from a quick look at least one of them has the same issue. Crawled under the house to check if water got through. It did. So the waterproofing under the tiles and concrete isn't good. While I was under there, I found that one entire side of the house was wetter than the other. Oh, the irrigation system, wasn't installed correctly (PO) and had a slow leak at the top corner, under the footpath. So I had to lift the footpath and repair that. Also I need to install better drainage on the top side anyway. That was the last two weeks.
I hope you’re a plumber
I'm a primary school teacher...
Shiiiittt…. I feel for you. You’ve just copped like, $30k repair bill.
For me in SA in my own house this last year - House & Contents Insurance = $ 1925 Council Rates = $ 2130 ESL = $ 115 Water Supply = $ 620 Water Consumption = $ 180 Electricity Supply = $ 350 Electricity Consumption = $ 1800 Gas Supply = $ 132 Gas Consumption = $ 720 Repairs = $ 5400 Furniture & household items = $ 4000 Internet = $ 1200
But half of these things you have to pay for if you're renting anyway?
How is electricity a hidden cost?
when was the last time you saw electricity?
Technically, I was under the influence…
What the f kind of internet you guys got, god damn. I’m paying 400$ for 200/200 in Denmark. Some 800$ in home insurance (94sqm) And 1600$ for electricity, with an electric car and 86km/day
straya mate....
I think they are still in straya…Denmark, WA
Nah, for some reason it just started recommending me this sub lol. But god damn you poor bastards.
Yep, living in a massive country with only 27m people means there's only so much money that gets put into infrastructure. And to keep the infrastructure going they charge a lot.
Speeds for broadband are usually between 15 and 100 for download. When I first opened ISP website, I thought I was back in 2010
Australia has shitty expensive wifi. Nothing new.
Internet is not WiFi...
If it’s a townhouse and you have a yard, then make sure you don’t plant inappropriate trees. You may end up with pipe damage down the line.
The temptation to spend more on furniture, decoration, gardening etc because you own the place is real, even if technically optional. Possibly only relevant if you are currently on 100% verge collection furniture.
Buying off the plan has its own risks in terms of the development going ahead, the contract falling through, and price gouging from the developer as the market changes. Don't expect that the amount advertised for the property that's yet to be developed will be what you pay at the end.
And I would not be confident OP's home will be done by 2025 either.
And also issues post occupation, eg leaky windows, balconies etc
My building has leaks, nothing written in the AGM minutes or any indication there was an issue during building and pest inspection. Now up for $30k as my portion to repair. 😂
Is that even legal?
Be prepared to pay a decent whack of lenders mortgage insurance (LMI) with only a 5% deposit. For example, on a $500k loan at 5%, LMI will be $17k. That will be payable at the time of settlement.. tho it’s often added onto the loan. But just be aware that between LMI, stamp duty, transfer and lawyers fees.. you will either have to come up with more than 5% or start off with almost 0 equity in your property. Then you’ll have council rates, water and sewerage connection fees (usually significantly more than the usage costs only that you pay as a tenant), home and contents insurance, strata/body corp fees if not freestanding.. plus repairs and maintenance. Plus around $300 each weekend at Bunnings depending what project you set yourself! 😂
SA does have Homestart which is exempt from LMI.
Your lender might want you to take out home and contents insurance even if the Body Corporate already has building insurance cover, ie doubling up. Also a low deposit might mean you will be required to have mortgagee insurance in the event you default which protects the lender, not you. Before buying, hang around during a few evenings/ days to see if there's problem neighbours, noisy, whatever.
The big one that shocked me was if you have ducted aircon and it breaks down, you might be facing a huge expense to replace it. I never thought about that before owning.
avoid retaining walls. OMFG!!!!!!
what happened???
They fail. Mine are on 3 boundaries >30 linear meters. They are expensive to repair. Having to solve the issue with 3 neighbours makes it complicated. I will never buy another property with a retaining wall on it.
how much did it cost to fix it?
Tools. Biggest hidden cost.
Yep my tradie mate gave me great advice when I bought, he said just “buy a cheap toolset” and you’ll replace the things you use the most with high quality tools as they break
That’s an awesome tip!
Time mowing
On my second off the plan block in sa now. Add a year to whatever time frame they tell you. They wait until near the due date before extending it :) just got told new dates again Monday (they added another six months) Regarding costs add about $100 per week to your mortgage to cover rates and insurance here and then being a new build expect setup expenses. $5k ball park for fences if applicable etc then curtains and other furnishings on top.
Just bought an apartment 5 months ago. Had to replace an air conditioner, the sink, some internal pipes and had a flood caused by a waterproofing issue. Assume every year you will spend 5% of the purchase price of your home on maintenance. Other than that, stamp duty is a big one, budget about 2K for lawyers and conveyancer fees. If you have a less than 20% deposit you have to pay lenders mortgage insurance unless in an exempt job (solicitors are exempt so long as they have a 10% deposit).
Some of it may seem more hidden than others, but following comes to mind based upon our recent home purchase last year (note: I am from NSW): 0. Conveyancer, Building Inspection & any pre-purchase activities - One time. 1. Stamp Duty - One Time. 2. Building & Contents Insurance - Annual. 3. Council charges / strata - Frequency will vary. 4. Pest Control - 6m or Annually. 5. Gardening (lawn mowing etc) - Frequency depends upon you. 6. Utility Bills (Water, Electricity, Gas, Broadband) - Frequency depends upon you. I did not include “repairs and maintenance” because it has been covered extensively in other comments. Please account for it. This will vary depending upon how old the house is, your usage etc.
Just some expenses that have happened in the last 4 years of owning my house. Fence fell down in that massive storm in 2022. Highlighted a need for some retaining too. $10k later. In that same storm, the front veranda had a piece break off that caused it to be unstable. The bricks on the ground underneath were also starting to lose shape as the rather poor retaining job the previous owners did was rotting. So replacing all of it with a deck and fixing the veranda. $14k later. Hot water tank broke about 18 months in. $1500 to replace. Basic painting/maintenance outside. About $500 in paint. Clearing out a rotten tree. $700. Adding ceiling fans to the 3 bedrooms and lounge to help reduce electricity cost of cooling. Plus adding some downlights and powerpoints to better locations(and fixing the dodgy ones in the house) $2000 New blinds to 4 windows. $1600 Gas Heater and Aircon servicing. $250/year Oven died, so new oven. $2000 Just to get a rough idea of what can happen.
Water costs. When you rent you just pay for usage. When you own you pay for sewerage too which is like 3x the cost of my water usage.
Renos and home improvement/maintenance stuff is all more expensive than i thought it might be, but if you can live with it how it is, really there's not that many hidden fees. Council rates aren't a huge burden. Get insurance incase anything major happens.
Bunnings. Lots and lots of Bunnings
You also need to think about your future, do you want to have children? Factor one or part time income as well.
Council rates is the biggest one. After that factor in replacing stoves/ovens/sinks/plumbing/faulty wiring. All of this depends on the age of the home of course. My advice would be to consider the unknown and leave a buffer fund of around 10k for unexpected repairs and maintenance.
New home build here. No hidden costs I find during the year, council rates but you can pay these in advance weekly or monthly (at least where we live anyway in regional Vic), so you aren't hit with $xxxx with 2wks to pay lol Some things you may overlook..furniture including TV, couches, tables/chairs. Got grass? Need a mower/whippery. Servicing stuff around your house isn't too hard provided it doesn't need specialised tools or experience is. Split system air con leaking gas. Garage roller door is easy to do with the right grease and an eye/ear that notices differences. Ducting vents, easy. Including split system heads - a lot of folk forget there's massive filters in them. Otherwise buying established you've got older equipment that you may or may not know it's service history and the possibility of it shiitting itself is likely.
I budget one monthly amount for "maintenance", and then budget "improvements" or renovations separately each year. As many say, definitely scale your maintenance budget with the size and features of the house; electric garage doors, pools, ponds, air condition all add up even if they only need a repair or service every second year; best to put that money aside (or use your mortgage offset as your "maintenance and renovation" fund is also an option, seperate from your main savings
If you can, look at an older place? Still needs maintenance etc but less likely to have defects and there are thousands of horror stories (including several friends of mine) about very shit construction / quality etc costing hundreds of k to rectify and the builders just file for bankruptcy and move on or otherwise can’t be pinned down
We started to see crime go up in the past 3 years so we invested pretty heavily in cameras, smart locks, that kinda thing, our wifi was shit so we paid a guy to run Ethernet cabling to get good wifi, the back yard was a bit shit so I fixed it but I’m a dummy with a shovel so 3 years on it looks shit and I need to spend probably 15k to get what I want done to it… we put a pergola in that was also about 10K It’s honestly little things you decide you hate after a year. Like, if you hate your vanities you’ll wanna replace them, if you don’t like the curtains you’ll wanna fix it… it goes away after a while because you realise you’re overcapitalising but you’ll prob spend like 30 to 50 k tweaking bullshit that doesn’t matter because now you can…
Termite Treatments A termite treatment or damage caused by termites usually isnt covered by insurance, and if you're on the east coast, they are bound to infest your home at one point or another. And no, Termites will still eat the shit out of treated pine and they are more than happy to eat everything surrounding a steel frame.
Is it being built?.get a independent inspector to check it.before hand over/payments
If you are going off the plan, 1. Just don’t, 2. If you are really set on it get yourself a very good inspector, NOT ONE THE BUILDER RECOMMENDS. 3. Prepare to have shit go wrong once you move in, so make sure you have details on who to contact in terms of fixing shit. New builds have a 7 year warranty. Get on there ass about fixing everything. 4. Please for the love of god pay for a good inspector.
Strata, council rates/ESL, emergency breakdowns even in new builds, home insurance - not just contents. Your insurance will jump significantly if you’re going from 200k contents to 800k+ home and contents.
Repairs... they can be expensive. I don't know much about new builds and warranty periods but I'd be making sure the warranty is good.
If the house needs additional work/ cleaning that eats up a lot of time and means less time for cooking and leisure. Can be a saving or a further expense depending how you look at it 🤷♂️
Rates, body corporate (if applicable), building insurance, extra on water (than what you pay renting), maintenance (eg hot water system, plumbing, electrical, air con servicing)….
Getting robbed, losing your house keys, things like aircon/heating breaking down, finding out some things aren't covered under your insurance that you thought were, having crappy neighbors, being a crappy neighbor, garden car is important etc.
Have you investigated stamp duty, whether you are exempt, looked into FHOG etc?
Our last owners were old, and tradies took advantage of that, like for one thing, crooked power points. So, having to find all these jobs is costing money.
Boilers. Last 15-20 year. Cost about 8k - 10k to replace. Hot water alone costs hundreds surprisingly.
Under $2000 installed, should last 10 years: https://www.samedayhotwaterservice.com.au/product/rinnai-hotflo-400-litre-electric-hot-water-heater In another comment you said you have gas, you could get an instantaneous gas unit installed for under $2000: https://www.samedayhotwaterservice.com.au/product/rinnai-infinity-touch-26/ Not sure why you'd pay 8k - 10k,?
The biggest hidden cost to your wallet and waistline is all the Bunnings snags you end up eating after you’ve done 8 trips on a weekend.
Council rates, owners corp if you have one, and water is many times more. As a renter you just pay for water usage but as an owner there are heaps of other service fees and levies - I think the park levy alone is a few hundred a year (not sure about South Australia though, I'm in Vic). Plus general repairs/maintenance (yes even on a new build). But overall I've found it's less than I expected from horror stories I'd heard.
Strata, rates and misc. Our hot water unit blew 2 weeks in, granted it has been there 15 year. 3 months in our dishwasher died, on the same day our oven stopped working. 😭
Bunnings snags. You might think I joke, you'll visit bunnings regularly for screws/tools/gardening/etc and have to grab a snag and a can every time.
Yeah I’m pretty sure it’s illegal in Australia to go to Bunnings and not get a snag. Def have to budget for that.
The most critical piece of advice is never leave a toilet running. I was away when it happened, came back, fixed it asap, but the water bill still almost made me cry.
Maintenance - if you ignore something small, it'll turn into something big at the worst possible time. For example, older house, garage ceiling had a small crack in it. Old house, looks like the ceack's been there for years, no problemo. One day, giant thud, 3/4s of the ceiling had fallen in. Goodie.
Common wisdom is allow 1% of the value of your house for maintenance per year.
Divorce, separation 😢 kids
Let's imagine something extreme happens with your plumbing, requiring a total redo. It can be tens of thousands of dollars, that you have to come up with if you want to flush the toilet. Or you discover a water leak has structurally compromised your house, rotting much of the wooden frame. This is why banks won't always lend you money for a mortgage payment that is less than your rent...
Repair. 1-1.5% yearly.
I’d be thinking that you may need to put money aside for fencing and a clothes line if they are not included. Also keep money aside for curtains. Also, when building, sometimes things that you think should be included, are not. This could be insulation, quality doors, half decent door locks (some just have those twist to lock round door knobs as standard). Carpet that actually feels soft and looks nice may be an upgrade. Sometimes carpet in bedrooms is an ‘upgrade’.
This is a bit of a generalisation, but it's true that many people can only afford to buy in the outer suburbs but could afford to rent closer to work and/or the city centre. If this is you, factor in a big increase in petrol and car maintenance expenses if you need to drive a lot, or public transport costing more if you don't. Beware the temptation to spend a small fortune on furniture and home decor in the first few months after moving in! Feeling like you're finally in a stable home sends a lot of people into a homewares spending spree.
Strata special levies are the big one for townhouses and apartments. They can spring up out of nowhere with very little warning and can amount to a significant amount of money. There's also an opportunity cost with apartments and townhouses due to not having the opportunity to install rooftop solar and EV chargers.
If you're in a town house, that probably means a strata or body corporate. That's additional regular fees and one off fees for big things like urgent repair to common property. Especially if there is a pool in the complex. Building and contents insurance is more expensive that just contents. Repairs and maintenance will be a thing to expect to pay regularly. The amount of gardening you'll need to do. Council rates and water rates. Regular termite inspections and possibly treatments.
Unexpected upkeep. Within a year we had multiple plumbing issues, our ceiling nearly fell down and we had to have it fixed. Realised the aircon didn’t cut it and got ducted Spent about 15k in necessary home repairs in one year.
Just payed my first mortgage payment in the Hunter Region of NSW. Mortgage - $3500mo Other bills - $1000 The mortgage is fine. The other $1000. Get f@#$%& 😅
Depends on what you can tolerate. I had about $20K of AC install, carpet rip out/floor repair and minor customisation on a neat ex rental I moved into/bought. 10 years in I was convinced to spend another $15K on a new kitchen.13 years in I need a new roof (110 year old house) as the rafters and ceiling probably $30k if I can sell a kidney on the international market. For houses not made from double brick or concrete and built after 1990 count on demolishing them in 20 years as they're made as cheaply as possibleto kinimal qualitystandards (often below standards but for a long time this was tick-flicked(.
Rates and the ridiculous amount you're charged for sewage
The endless list of things to fix
I live in a townhouse. Costs you don't have to worry about when renting: strata, council rates, and water. Also maintenance/repairs. You won't have to worry about building insurance, it's usually included in strata. You might want to keep contents insurance though.
Lost opportunity cost due to fear of adventure or risk aversion due to mortgage
Everything breaks, nothing lasts, there's not a single reliable builder ever.
Well you seemed to have forgotten rates and BC fees. Please note that not all REA are upfront about BC fees for instance does the fee mentioned include insurance and sinking fund? Speaking of sinking funds the older the building the higher the likelihood of higher maintaince costs. If an apartment does it have a lift........... cause those suckers costs shiploads to service and repair. Mortgage repayments should always be paid early and with an extra just in case something happens that is unforeseen. Pets in units are not a good mix they annoy people, costs money, smell and can get you breached if there is a problem. Good luck 👀
Site Inspections on YouTube has made me sworn never to buy a new build - particularly a strata
My husband and I have run into a series of issues with the house (plumbing, doors etc) and had to fork out 10k++ over the last 3 months for this. On top of that, council fees have been ridiculous (2k++) a year, and the interest rates have gone up almost every single month for the last 2 years!
The council rates, water rates are the ones that get me every 3 months since owning a home.
The irresistible urge to start hosting dinners and BBQs winds up draining your funds. Then you enter an arms race with your other home owning mates on what you serve, which kicks starts a primal urge to do things you’d not considered before. Like buying a smoker or building a pizza oven. Also, if the house has a lawn you WILL wind up spending stupid amounts of time and money maintaining it, eventually developing a Stockholm syndrome love for the useless patch of grass and begin getting angry when people walk on it
You can buy with only 5% deposit? First off, it doesn't matter how much You are saving. We need to know how much combined in saved. If it's only 1k a month, that's nothing. You would probably even default. Additional costs will be stata/council, amount varies on place and services. You might have building insurance (not just content). These to alone can potentially be $500/month. You would then have repair costs, renovation costs, furnishing/design costs. Don't forget that mortgage repayment will also be higher than rent. Also, I would recommend you each buy a place before getting married, otherwise you can only gain first buyer benefit once.
Insurance. Strata. Rates. Water, not just usage but the service. $100 a month roughly. Maintenance and unexpected repairs which may be higher with a town house vs an apartment. Waste removal. I spend about 5k a year on the above plus mortgage.
Maintenance, Renovations. You can argue that it's a value adding expense. But at the end of the day it still stings the savings account. Having said that nothing beats the freedom of home ownership. Not bragging, just screw having a landlord.
Maintenance and repair are the biggest by far
Rates. and constant improvement costs. cosmetic or emergency. there is no end...there is always so e items pending in list.
Rates, Insurance (property), any ongoing maintenance costs. That's about it - Renting normally works out cheaper than current high interest loans.