The Hidden Costs of Buying an Investment Property (And How to Plan for Them)
Buying an investment property is one of the most powerful ways to build long-term wealth — but it’s not just about the purchase price.
Many investors are caught off guard by hidden costs that creep in before settlement, at handover, and even during the first year of ownership.
At Focus Property Group, we believe clarity = confidence. So here’s what to watch out for — and how to plan properly.
1. Stamp Duty
This one isn’t exactly “hidden”, but it’s often underestimated. In most Australian states, stamp duty on a $600,000 investment property is roughly $20,000–$30,000, depending on location.
✅ Plan for it early, and use online state calculators to estimate accurately.
2. Building & Pest Inspection (for existing properties)
If you’re buying an established home, a building and pest report is essential — and can cost between $400–$800.
✅ Budget for this upfront — and treat it as non-negotiable due diligence.
3. Site Costs and Variations (for new builds)
Retail builders often advertise “base prices” that exclude critical site works, fencing, landscaping and driveways. These extras can run $20,000–$50,000+.
At Focus Property Group, we prefer fixed-price turnkey builds, which bundle in all inclusions so there are no post-contract surprises.
4. Lender & Legal Fees
These vary depending on your lender and broker but can include:
Loan application fees
Lenders mortgage insurance (if borrowing over 80%)
Conveyancing fees
Title searches
✅ Expect around $3,000–$6,000 in total depending on loan size and state.
5. Council Rates, Insurance & Ongoing Costs
Once you own the property, the real costs begin:
Landlord insurance: $400–$700/year
Council rates: $1,500–$2,500/year
Property management: 5–8% of rent
Maintenance reserve: Always allow 1–2% of property value annually
6. Vacancy Buffers
Even in high-demand areas, your property may sit vacant for 1–4 weeks a year. Be prepared to cover the mortgage during that time.
✅ We recommend setting aside 1 month’s worth of rent per year as a buffer.
How to Plan for These Costs
At Focus Property Group, we guide our clients through every step of the process, including:
✔️ Clear breakdowns of all upfront costs
✔️ Accurate cash flow modelling
✔️ Sourcing fixed-price, fully inclusive builds
✔️ Creating a buffer plan for peace of mind
📞 Ready to invest with clarity?
Book your free 15-minute strategy call and we’ll show you exactly what to expect — no surprises, no guesswork.
👉 www.focuspropertygroup.com.au
1 300 702 885
info@focuspropertygroup.com.au
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IMPORTANT DISCLAIMER: The information provided in this article is for general informational purposes only and does not constitute financial advice. All information is provided in good faith, however, we make no representation or warranty of any kind, express or implied, regarding the accuracy, adequacy, validity, reliability, availability, or completeness of any information in this article.
Focus Property does not provide financial advice. You should not act upon the content of this article without seeking advice from a qualified professional. The content of this article is not a substitute for professional advice tailored to your circumstances. Focus Property will not be liable for any actions taken or not taken based on the contents of this article.