Ultimate Rental Guide
March 2011, First Edition
Renting a property can be a very daunting process and without the correct knowledge can leave many feeling overwhelmed.
This guide has been developed to provide you with everything you need to know about renting. With the help of various tips, checklists and calculators this useful guide will help you to navigate the market and secure your ideal rental property.
- Should I Buy or Rent?
- How To Maximise Your Chances Of Securing A Rental Property
- Key Questions To Ask Before Signing A Tenancy Agreement
- All You Need To Know About A Bond & Upfront Rental Payment
- The Responsibilities of Your Landlord
- Things To Do Before You Move In
- Your Rights as a Tenant
- Sharing a Property
Should I Buy or Rent?
When it comes to property, the age-old issue has been should you rent or should you buy? There are strong arguments to both sides and therefore it is important to consider the facts and your own personal circumstances before making a final decision. Part 1 of our guide will assist you to weigh up the facts to make an informed choice.
Understanding the Costs Involved When Considering to Rent Vs. Buy
There are various costs involved in the buying and renting process. These must be individually calculated and examined in order to determine which option is more suitable for your personal circumstances.
Use the following chart to establish the costs you will incur by opting to rent a property.
|Upfront Rental Payment||Once off payment||INSERT|
|In most instances you will be required to pay a month’s rent in advance, however this payment amount differs from state to state.For more information about the upfront costs you will incur by state refer to “All You Need to Know About a Bond & Upfront Rental Payment”, of this guide.|
|Bond||Once off payment||INSERT|
|The rate of the bond will slightly vary from state to state, but is generally equivalent to 4 weeks rent.For more information about the upfront costs you will incur by state refer to All You Need to Know About a Bond & Upfront Rental Payment, of this guide.|
|Rental Application Fee (if applicable)||Once off payment||INSERT|
|You may be requested to pay a rental application fee which is used to cover the cost of a credit check or other costs related to processing the application.|
|Monthly Rental Payment||Monthly payment||INSERT|
|Cost of rent will vary from property to property and depends on the location. Research the cost to rent properties in your preferred area online to calculate costs.|
|You will need to pay for electricity, gas and in some cases water usage.|
|Contents Insurance||Annual payment||INSERT|
|This will cover you from damage or loss of personal belongings.|
|This includes cost of the connections of all the utilities and services you will need or wish to have, which are not paid by the landlord as part of the rental agreement.|
|Deposit||Once off payment||INSERT|
|The deposit needed to purchase a home is 10% of the asking price.|
|Loan Establishment Fees||Once off payment||INSERT|
|Some financial institutions will charge an establishment fee to cover the set up costs for your loan.Consult your financial institution to determine establishment fees.|
|Lenders Mortgage Insurance||Once off payment||INSERT|
|If your deposit is less than 20% of the value of the property, the lender will require you to pay mortgage insurance.Consult your financial institution to determine likely costs to insure your loan.|
|Mortgage Registration||Once off payment||INSERT|
|Your mortgage deed must be registered with the government. This process will incur a fee.Consult your financial institution to determine likely costs of your registration.|
|Connections||Once off payment||INSERT|
|The cost of the connections of all the utilities and services you will need or wish to have.|
|Property Valuation||Once off payment||INSERT|
|A third party often chosen by the lender needs to determine the value of your land and improvements.Consult your financial institution to determine likely valuation costs.|
|Stamp Duty||Once off payment||INSERT|
|Stamp duty costs will differ from state to state and will depend on the purchase price of the property.Refer to the link below to calculate stamp duty costs www.stampdutycalculator.com.au/stampdutycalculator|
|Legals||Once off payment||INSERT|
|Legals will cost you approximately $600-$800. This covers the legal transfer of ownership and will be conducted by a solicitor or conveyancer.|
|Mortgage Repayments||Monthly payment||INSERT|
|The mortgage rate will depend on a variety of factors including institution, loan type, whether interest payment consists of interest only or principal and interest. You also need to consider the impact of rate rises.|
|You will need to regularly pay for the costs of all your utilities and services.|
|Council Rates||Quarterly or annual payment||INSERT|
|Payable yearly or quarterly, your council rates will depend on the council in which your property is located and the value of your home.|
|Body Corporate Fees||Quarterly or annual payment||INSERT|
|If your property resides on a shared block (e.g. is a townhouse, unit or flat), it is likely to incur body corporate fees. These fees cover maintenance of common areas and sometimes cover building insurance. The fees will hugely depend on the condition of the property, its features and the area.|
|If your property resides on its own block, it will not be subject to body corporate fees. However, you will be responsible for building insurance and maintenance.|
|Yearly Mortgage Fees||Annual payment||INSERT|
|Your loan may be subject to a yearly loan account fee. It is important to consult your financial institution to determine if this is applicable. Also ensure you budget for possible rate rises as interest rates fluctuate yearly.|