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The general rule is that property doubles in value every 10 years. This doesn't necessarily mean it increases by equal amounts each year. A property might remain at the same value for 3 years, then surge up 40%, or infact down a bit. It is dangerous to presume the property value will go up. If you create a situation where you are required to sell by a certain date, god help you if the value has gone down. You want to be able to hang on to the property until it is worth a suitable value.
Remember that if you sell investment property it is subject to capital gains tax.
I'd always go with an investment that is about land. It is land that goes up in value, not the dwelling on it. In that regard, I'd steer clear of the city studio option altogether. I'd go with something a tiny bit out of the city that is sitting on its own piece of land that is not shared with anyone else
Hi matie
OK here is an online stamp duty calculator for you ; http://www.realestate.com.au/cgi-bin/rsearch?a=calc&jar=StampDuty
A call to a couple of local solicitors would help you establish the legal costs they charge to cover their services to help you with buying a property. Note they will hire a surveyor, so ask about the portion of the fee that pays for the surveyor. You'll probably be up for a figure less than or equal to $2k.
You absolutely must ensure you can afford to pay the mortgage yourself for a couple of months if your tenant stops paying. If they choose to do this, you cannot even serve an eviction notice until they are 14 days late in payments. Then a tribunal hearing gets set, which is not going to occur immediately just because you are out of pocket. It takes a couple of months to get problematic tenants out, and hopefully they will not trash your house or steal things, leaving further costs for you to absorb.
Shop around with some insurance companies – you will need Landlord insurance With Tenant Protection. Google "Landlord insurance With Tenant Protection" and you'll be presented with some starting points.
Please promise me that you will not rush in and buy anything in the next couple of weeks. I can see that you have much research and number crunching to do before you arrive at a model that is comfortable for you to sustain. You must ensure that you can absorb a worst case scenario. If a tenant starts to do anything wrong – you will be out of pocket. It is merely a question of how much. A few dollars in extra mortgage interest due to late payments, or thousands in lost rent and damaged property.
PS remember that there are certain costs that you have to pay. The tenant doesn't pay them. They are costs such as insurance (this will easily cost you at least $500 a year), some water costs (call your local water supplier to ask what a landlord pays and what a tenant pays – you pay the lot unless you specify otherwise – I think as a landlord I'm paying $300-$400 a year for the water bill), and council rates (probably about $1200 a year on a place worth $300k – call the local council in the area in which you intend to buy and ask them). Remember also to factor in interest rate rises on the loan.
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