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16/11/2009 -
Indicative purchase costs of motels |
Investing in a property, and in particular a large property, can be a very expensive and a very time consuming exercise. Many factors have to be considered.
Many people are shocked to find out the ultimate cost of making that investment.
Listed below are some of the costs that will be encountered; In most purchases, all of these costs will have to be borne by you as a buyer. However, there may be opportunities to save some money. For example; a valuation report may not be required if, as a buyer, you are not highly geared. A survey report may not be needed if a vendor has a recent report available.
1. Valuation. Most financial institutions will require a valuation depending on the degree of finance required. For a property around the .5 to 1 million this could be $3-7,000.00. Some financial institutions may not require a formal valuation if the ratio of borrowings to purchase price is low. If the property is purchased at an auction, it is most probable that a valuation report may not be required.
2. Pest Report. A check for white ant activity and etc. and for possible subsequent damage. A written report is supplied. Could be $6-900.00
3. Building Report. A report on the general condition of the building and its structure. $800.00 to $1,500.00 for the average property. This will vary according to the complexity of the property and its structure.
4. Legal Fees: $2000-12,000.00, depending upon the complexity and the amount of work that the solicitor has to do. If there are collateral contracts, such as a third party mortgage, this will mean extra complexity and work for the solicitor.
5. Survey Report: $800-1,300.00 depending on complexity.
6. Stamp Duty. Stamp Duty is a tax levied by a State Government, on a transfer.
Some examples of duty payable are shown for NSW.
For a one million dollar property the duty is, $40,490,.00
For a 500,000.00 dollar property the duty is, $17,990,.00
For a 300,000.00 dollar property the duty is, $ 8,990,.00
I think you will agree, a real shocker!
As can be seen the costs are considerable. However, check with your advisors as to your requirements and get competitive quotes. Form a rough estimate for the funds required to make a purchase and deduct this amount from your available funds. The balance left of your funds is the amount that you have available as a deposit on a motel.
Good luck! ** Please note. The amounts shown are estimates only, and are subject to wide variation. You will need to make your own inquiries
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