Costs and benefits of buying a home

Saving a deposit can be the highest hurdle to home ownership, At Keystart we're here to help more people get started, so all our loans have a low deposit, meaning you may be able to get into your own home sooner. We have some tips for saving towards your deposit too. 

But there are other costs of home ownership to be aware of too. Sometimes these can take new home owners by surprise. The more prepared you are, the more you'll enjoy moving into your own place.

1. Building inspection

A building inspection is a report on the current condition of a property. Before you buy a house, it's recommended to have your new home checked out professionally to ensure there are no nasty surprises that potentially could cost a lot of money to rectify.

Once a report has been compiled on the condition of the property, you can then make an informed decision based on the findings. Often items can be fixed by the seller and you could include in the contract that your purchase be subject to a favourable inspection.

We may require a structural or building report from a registered builder, structural engineer or structural surveyor depending on the information contained in your valuation report.

Building and pest inspection costs vary but you may expect to pay between $250 for a small apartment up to perhaps $1,000 for a larger four-bedroom in the metro area. You might want to get quotes from different providers.

2. Moving costs

This one comes down to how much stuff you have! Are you able to entice some family or friends and hire a trailer to move your things – or do you need a moving company? Moving companies charge by the hour and the distance they are required to travel and quotes can vary widely. Try to get a few quotes before you decide.

3. Settlement agent

You'll need to pay your settlement agent's fee, whether you're buying a block of land or an established home. Your settlement agent will be able to provide you with their fee structure, so you'll know how much to put aside.

4. Stamp duty (also known as transfer duty)

If you are a first home buyer you'll be eligible for the stamp duty rebate. You may still be required to pay stamp duty for the purchase of your home or land if it is over a certain value or if you are not a first home buyer. The Office of State Revenue has a stamp duty calculator to help you with this. Be sure to select the correct rate type. 

Stamp duty calculator: Office of State Revenue 

5. Planning for bills

As a home owner you'll need to commit to paying your utilities on time. Most of these providers have options for paying a monthly direct debit amount which may help you manage your costs.

If you've been renting you may already be aware of your utility bills, although if you've been lucky enough to share these costs with roommates, you'll need some additional funds to cover these bills once you're on your own. You could consider setting aside the amount you would need to cover these on your own. Then if your bills end up being slightly less, you'll be covered.

• Power bills are issued every two months. You can find an excellent power usage calculator on the Synergy website, factoring in the appliances you'll have in your home. 
• There are a few providers in the gas market in Western Australia now – and most of these have website calculators to help you estimate your gas bill.
• Your water bill has two parts, water rates and usage. You can find out more about water costs at the Water Corporation website. 
• As a home owner, whether you have built a new home, an established house or an apartment or a flat, you now need to pay your local shire or council rates. These fees are used to fund your local government council and may be used to maintain public spaces, facilities and infrastructure. The amount you'll need to pay in council rates varies depending on your location. Each shire calculates rates based on land values. If you are in an apartment or unit, your shire rates may be less than a house, but you will still have rates to pay every year.
• If you buy an apartment, you'll also have to pay strata fees to cover the costs of the exterior building maintenance, and electricity and water charges for common areas, and the general upkeep of common areas such as a pool, lift or gym. You should be told strata fees as an annual amount before buying a property and you may have options in the frequency of payments.

6. Protecting your home: Home and contents insurance

You now have an asset that you need to protect. For most of us, buying a home is the biggest investment we'll ever make. You need to ensure you always have current insurance to protect your assets. 

If you have a home loan with us, it is a requirement that your property must be adequately covered with building insurance. This protects your home and offers some protection to us too. You need to ensure you always have a current building insurance policy in place, with Keystart noted as your lender. If you are living in an apartment or unit, you may have building insurance covered by the strata - check with your strata manager if you are unsure.

Read the article: Insurance: one critical cost for homeowners

7. Settle in for the long haul

• Add your finishing touches. It's so exciting to move into your own home and it's pretty common to want to spend any spare cash on new furniture, small renovations, and landscaping. Consider your urgency in getting these finishing touches in place. You might be better placed if you stagger your projects and your purchases.
• DIY and home maintenance costs. Every home needs maintenance to keep your home in good condition. Even a brand-new build over time will need some funds set aside for maintenance. Sometimes these costs are unexpected so you might want to start an emergency fund for maintenance and upkeep of your home.
• Can you make any additional payments to get ahead? Once you're in your own home, you can really set yourself up for success. Remember that you can pay your home loan off faster if you change your payment frequency to weekly or fortnightly.

1. Grow your wealth

When you own a home, its like putting money in a piggy bank. As you make those home loan payments, you’re not just paying bills, you’re building equity. In other words, your property is a long term investment that is expected to grow and increase in value over time.

2. Feel stable and secure

Owning a home provides a sense of stability and security. Unlike renting, you aren’t subject to sudden rent increases or the uncertainty of lease renewals. This makes budgeting and saving and whole lot easier in the long term.

3. Making it your own

Thinking about painting the living room, or getting rid of the old carpet for some fresh new floorboards? No need to contact your landlord when you own your own home.

4. A sense of community

When you’ve got a place to call your own, you start feeling more connected to the neighbourhood. You’re not just passing through, you’re putting down roots. Being part of a community can provide a sense of wellbeing and support.

5. Long term property market

Owning a home could be part of a long-term financial strategy. As your home loan is paid off, your homeownership costs will likely decrease over time. Generally, property will go up in value over time, so when you're ready to downsize, you may have accumulated a valuable asset. 

6. Passing down assets: A future for your kids and grandkids

If you own a house, it can be like passing down a family treasure. Your home could become an asset for your children or grandchildren.