🏠Getting Started in Property Investment: Understanding the true cost of buying & owning investment property in QLD

Many new investors focus on the purchase price of a property without realising the wide range of expenses that are involved in the purchase let alone those that come with owning a property. Knowing your costs when you're getting started or adding to an existing property portfolio means that you can budget realistically, calculate ongoing cashflow year-to-year, month-to-month, even week-to-week allowing you to make educated decisions and avoid the stress that comes with the feeling of being in over your head.

Here’s a breakdown of the different types of costs to expect when it comes to purchasing and owning investment property in Queensland. Remember that the costs given below are meant to give you a general idea. It is important that you do your own calculations based on your own circumstances as everyone's situation is different.

Upfront costs when buying an investment property

Before you even get the keys to your new investment, you’ll need to cover:

• Stamp Duty (Transfer Duty): Higher for investors than owner-occupiers. For example, a $600,000 investment property attracts about $20,025 in transfer duty.

• Title Transfer (QLD Titles Office): Dependent on price & number of lots (for a single lot house up to $1.2mil, allow 0.3-0.45% of purchase price as a rough estimate)

• Mortgage Registration Fees: currently $237.20 each

• Conveyancing & Legal Fees: Typically $1,000–$2,000.

• Loan Setup Costs: Bank application, valuation and settlement fees (0.5-2.5% of the loan amount depending on the lender).

• Building & Pest Inspections: Between $400–$800.

• Lenders Mortgage Insurance (LMI): If you borrow over 80% LVR (Loan to Value Ratio). Each lender calculates this differently and depends on the value of the property and the LVR that you are borrowing at.

• Buyer’s Agent Fee: Allow 1–3% of purchase price (if used). I offer a fixed price service for investors so you know exactly how much you'll be up for.

Ongoing Holding Costs

Once you own the property, you’ll face recurring expenses, including:

• Mortgage Repayments Work out if you'll be paying interest + principal or interest-only.

• Property Management Fees: Typically 7–9% of rent + GST.

• Letting/Advertising Fees: Usually 1–2 weeks’ rent when re-letting.

• Council Rates: commonly $2,500–$4,000/year depending on council.

• Water Charges: Landlords cover fixed charges; tenants can be billed for usage if the property meets QLD’s water-efficiency standards.

• Land Tax: Payable if the taxable land value of your holdings exceeds $600,000 (lower thresholds for companies/trusts). Foreign owners also pay a 2% absentee surcharge.

• Body Corporate Fees: (if strata property) from $2,000 up to $10,000+ depending on facilities.

• Insurance: Landlord insurance ($400–$700/year) plus building insurance if not covered by body corporate.

• Repairs & Maintenance: A safe buffer is 5–10% of annual rental income.

Tax & Compliance Costs

• Depreciation Schedule: Quantity surveyor report ($600–$800) to claim depreciation deductions.

• Accounting Fees: More complex tax returns ($300–$800+).

• Capital Gains Tax (CGT): Payable upon sale, with a 50% discount if held longer than 12 months.

• Negative Gearing: Losses may be tax-deductible at the end of financial year but you’ll still need to cover the cash shortfall.

• Compliance Upgrades:

  • Smoke alarms: All rentals must have photoelectric, interconnected alarms (compliance can cost $1,000–$2,000+).

  • Pool safety: A valid compliance certificate is required for rentals.

Occasional / Hidden Costs

• Vacancy Periods: Mortgage and bills don’t stop when rent does.

• Tribunal Costs: If disputes with tenants arise (QCAT).

• Upgrades/Renovations: From new appliances to full-scale improvements.

• Utilities: Owners may sometimes be responsible for certain shared or fixed charges.

  
  

Let's look at how this might play out in a common scenario:

Ben and Jane are a working couple in their 30s. They've just purchased their very first investment property in Ipswich, QLD, at a price of $720,000.

Costs involved in the purchase:

Deposit:	$72,000 (10% of purchase price)
Stamp Duty:	$25,425
Title Transfer:	$2,652
Mortgage Registration:	$237.20
Conveyancing:	$1,200
Building & Pest Inspection:	$560
Buyer’s Agent Fee:	$13,200

That's a total out of pocket of $115,274.20 to get the keys of the property in Ben & Jane's hands.

The following aren't out of pocket straight away but are added to the loan amount at set up:

Lenders Mortgage Insurance (LMI): $27,772

Loan set up cost: $9,720

Which brings the loan amount to $685,492.

Now for ongoing costs:

Mortgage Repayments (30 year term): On a 6.55% variable rate Interest-only & 6.29% variable rate Interest + Principal.	Ben & Jane will pay Interest-only for 5 years at $3,739 per month. Interest + principal would be $4,236 per month.
Property Management Fees:	$2,262 annually (the property is rented at $580 per week)
Letting/Advertising Fees:	$1,160
Council Rates:	$2,600 annually
Insurance:	$1,460 annually (Home, contents & Landlord Insurance)
Repairs & Maintenance:	$5,000 kept aside annually

Other costs:

Depreciation Schedule:	$800
Accounting Fees:	$990 annually

Total Annual Costs:

In the first year of ownership Ben & Jane are out of pocket $115,274.20 in purchase costs + $59,140 in ongoing costs.

It took Ben & Jane 3 weeks from purchase to get a tenant in to the property so the rent income for the first year came to $28,420. This tenant signed a 24 month lease.

Total out of pocket costs in Year 1 came to $145,994.20.

In Year 2 this number comes to $27,020 (assuming the tenant stays on for the full 24 month lease and carrying over the $5,000 buffer from Yr1).

---

Final Thoughts: 

When buying investment property, whether you're starting out or you've been doing it a while, its easy to get swept up in the excitement and even the FOMO, skipping the slightly less exciting parts of the process such as knowing your budget and mapping out how your cashflow is going to work once you've bought the property. The last thing you want to do when you're building your portfolio is to jump straight in, not realising you've over-stretched the budget and be forced to make a quick, possibly poorly timed exit. As I said above, these costs are to give you a general idea, but by being well prepared for upfront, ongoing and exit costs, you can avoid stress, be able to make decisions to improve your short-term cashflow and in turn, make smarter long-term investment decisions.