Cost of having a rental home?

Hi,

This is my first post. So I am thinking of buying a house (new built) near Melbourne, perhaps in a Stockland estate, such as Allura or The Address. I am planning to buy now and rent it out during the next 16 years, with a tenant paying the mortgage, and then in 16 years I retire and move in it.

I have the following questions:

1) How easy or difficult is it rent a house in Allura or The Address? I think it's mostly families who would live there, and they would try to buy a house rather than renting? So it might actually be difficult to find tenants for my flat?

2) What characteristics should my house have? An agent recommended 4 bedrooms, but for my own needs, 3 would be enough. He said 4 bedroom houses are easier to rent out, and the go to families who stay longer and take care of the house. Do you agree?

3) What costs would I have? 1) management fee (for the agent), about 7.7%, 2) body corporate fee (not for Allura according to a agent, or do you know how much it usually is?), 3) council tax (about $2000/year?), 4) water bills (I have to pay them myself, or does the tenant pay? Usually about $1,200/year). Anything else?

4) Am I correct in thinking that it's better to buy in an estate that is up to 25 km from Melbourne CBD? Or should it be less than 20? Or up to 30? Or better try to buy as close as possible, even if it's not in an estate?

5) In general, would Stockland be one of the best developers? Which others do you think I should consider, or not consider?

I know these are many questions, but if someone can help in answering even only some of them, that would be absolutely great!

Thank yo so much!!!

As I am now in semi retirement and have downsized from a 4 bedroom house I would say a smaller house would be the better option.

Smaller houses will generally be easier to find tenants for the more convenient they are for Melbourne CBD, and are likely to be more useful for you in retirement.






The tenant pays the usage . . . You pay the fixed charges.

Thanks. How much would the fixed charges be (more or less)? Really $100/month?

This is a building forum. You are asking an investment question better suited to the Somersoft forum and the like.

You need to add costs such as interest, management fees, water, council rates.

You need to work out perceived rent then do the sums to see how much it will cost you to hold. With new properties there are generous depreciation so you may not be out of pocket fort the first few years. By then rent should be higher to cover costs.

To asses if renting it out is viable look at how many places are for rent at the moment. Also look in the back of investment magazines for vacancy rates. As several rental agents (not selling agents) about rent desirability for the area.