Have you ever dreamt of owning property on a picturesque island with a view that takes your breath away? Before you get lost in the allure of such a prospect, it’s crucial to have a firm grasp of the financial realities involved.
In this blog, we’ll explore the essential financial considerations when buying property, particularly on an island, where the property market is both enticing and challenging.
Understanding Financial Numbers
While the view may be mesmerizing, it’s equally important to understand the financial numbers and understand them well. Holiday rental properties on beautiful islands come with their unique set of challenges and additional costs. Here’s a closer look at what you should consider:
1. Purchase Price
The property you’re eyeing may be enticing, but it comes with a hefty price tag, typically around four million dollars. This initial investment is a significant factor to ponder when contemplating island property ownership.
2. Council Rates
Owning such a property entails annual council rates, which usually amount to about five thousand dollars. These rates contribute to local government services and upkeep.
3. Strata Fees
If you’re considering apartment-style properties, you’ll need to account for strata fees, which can be substantial, totalling around forty thousand dollars annually, roughly ten percent of the purchase price. These fees cover the maintenance of shared areas, facilities, and services.
4. Evaluating Rental Returns
The allure of rental income might look appealing, but what if your property faces vacancies? It’s essential to calculate whether you can comfortably cover all property-related costs, especially during times when the property remains unoccupied.
5. Leasehold Land
It’s crucial to understand that the property you’re eyeing is not freehold; it’s leasehold land. This distinction may affect your ability to secure financing from banks, as they might have different policies for leasehold properties. Consider discussing your financing options with a knowledgeable expert before proceeding.
Get Expert Advice
If these financial considerations have raised questions or concerns, please don’t hesitate to reach out for expert guidance. Buying property on an island is an alluring prospect, but it’s not without its complexities. Our team at Porters House is here to help you navigate the intricate world of property investment, particularly on stunning islands.
Start Your Property Investment Journey with Porters House
With Porter’s House by your side, you can turn your dream of owning island property into a reality. Let’s make that view yours – contact us today for expert advice and support. Your property investment adventure awaits!