EVERYONE knows buying your own home can be a pretty costly business.
But it’s the hidden extras which can really set you back, adding thousands to your already huge bill.
From seeking professional advice to taking time off and eating lunch on the run, these seemingly little costs all add to the growing expense of buying property in Australia.
Buying coffee here and there may seem like a small expense but can easily add $250 to your expenses assuming you and your partner buy one a week every Saturday for a year of course.
According to financial comparison site finder.com.au, buying coffee is just one of the smaller expenses people don’t even think about when house hunting.
New research by finder reveals hidden extras can easily add up an extra $20,000 to the cost of buying a home – that’s without even thinking about stamp duty and legal fees.
Finder.com.au spokeswoman Bessie Hassan said many property buyers wrongly believed they have the upfront costs of buying property down pat.
‘However the reality is that there are several miscellaneous expenses that you may have omitted from your budget spreadsheet,’ she said.
‘If you haven’t accounted for the wide spectrum of costs needed to secure property (think coffees and take-out lunches), not to mention the time investment required for property search), then you may have missed the mark as far as budget planning and savvy property buying is concerned.’
Ms Hassan said people could easily be slugged with major upfront costs even before they got their hands on a set of keys.
While few people would house hunt every weekend for a year, the extreme example highlights how each expense can easily add up.
Here are some of the hidden extras potential buys can face based on house hunting over a one-year period.
This can include accessing suburb property reports from sources such as CoreLogic RP Data – but be warned you may be hit with a fee.
Ms Hassan said people should be prepared to budget around $150 per suburb report.
‘If you accessed one property report per month, this would be a monthly cost of $150,’ Ms Hassan said. ‘If it took you a year to find the right property, your information cost would be $1800.’
Thrifty buyers can easily save a few quid by sourcing reports for free, such as Residex, although the level of detail may not be as comprehensive.
No-one goes into buying a house without doing their research and this can include getting advice from people in the know such as your accountant or financial planner who can easily charge $200 per hour.
‘If you visited an accountant for three one-hour sessions over a year, this would be $600,’ Ms Hassan said.
‘To minimise this expense, you could consult a friend or family member who has an accounting or finance background.’
PETROL AND ROAD TOLLS:
Filling up might not register to most people as a hidden cost but the reality is if you’re looking to buy, you’ll want to inspect and if you’re checking out a few places at once, chances are you’ll be in a car.
Depending on where the property inspections are, finder has found most people should budget around $50 per day.
Then there’s road tolls, which can be avoided but if you’re after the quickest way to get somewhere chances are it will involve a toll which averages out around $13 for a return trip, depending on the route. But Ms Hassan said it can easily work out to be more.
‘If you inspected properties on three separate days per month, you would need to budget $63 per day and $189 per month. Over 12 months? That’s $2268 for petrol and tolls.’
Those wanting to save can try using Google Maps or plan the route so you don’t have to fork out for tolls in the first place.
We all need to eat let’s face it and if you’re out and about you’ll probably grab something on the run which in most cases will cost around $15 a day.
‘Assuming that you’re taking three days out of your schedule, your lunch budget would be $90 per month. That’s $1080 per year,’ Ms Hassan said.
Unless you take a packed lunch or go without be prepared to pay up.
The saying time is money doesn’t ring truer in the case of house hunting.
While most people inspect properties on the weekend or after work hours, in some cases you might need to take time off work, which can cost you.
‘If you’re on a $85,000 annual pay cheque and you take one day off work per month, this would set you back approximately $350,’ Ms Hassan said.
‘If you took one day off each month over the full year, that’s $4200.’
That figure can double if your partner comes along each time which adds up to $8400.
Unless you’re lucky enough not to pay for internet or have unlimited data, be prepared to pay for extra if you need it, especially if you’re doing a lot of searching.
According to finder, an hour on your phone (for both you and your partner), can easily chew up 3GB (for high definition video streaming).
‘As most providers charge $10/GB for each extra GB, this would cost you $30 per hour,’ Ms Hassan said.
‘For your three dedicated days of property searching, the total mobile data cost would be $90. Add this up over a year and that’s $1080 gone. ‘
Kids can be expensive, and so can looking after them especially if you’re having to pay to get them watched while you’re househunting with the average cost of daycare hovering around $70-$150 per day.
‘If you can’t bring your kids along with you to the property inspections, then you could be forking out $150 per day for childcare. That’s a monthly childcare cost of $450, or $5400 over 12 months,’ Ms Hassan said.
But don’t think the shelling out stops once you’ve found your home.
In fact, once you’ve put your deposit down be prepared to keep paying up.
Assuming you’re purchasing an owner-occupied property valued at $612,200 and take out a loan of $489,760 and you had a 20 per cent deposit of $122,440 you’ll be hit an easy $20,000 bill upfront.
This includes $15,388 for stamp duty alone, $1000 for legal fees and $500 for building and pest inspections just to name a few.