Ongoing Costs of Owning a Property

Buying the property is just the beginning. Once you’ve settled, there’s a range of ongoing costs that come with owning a home, and budgeting for these properly means you won’t be caught short down the track.

Council Rates

A rate paid to your local council to fund services like waste collection, roads and local infrastructure. This varies significantly by council and property value, but is usually paid quarterly, half yearly or yearly and can range from around $1,500 to $4,000+ per year.

Water Rates

Charged by your water authority, this typically covers a fixed service charge plus your actual water usage. Budget somewhere around $800 to $1,500 per year depending on your household size and usage habits.

Building Insurance

Covers the physical structure of your home against events like fire, storm damage and other listed events. This is compulsory if you have a mortgage, as your lender will require it. Costs vary based on your property’s value, location and construction, but budget roughly $1,000 to $2,000+ per year. Or can be much higher for high risk areas (flooding/bush fire prone). I would recommend you check an estimated building insurance cost before making an offer for any property. 

Contents Insurance

Covers your personal belongings inside the home. Not compulsory, but worth considering, especially if you have anything of significant value. Usually adds a few hundred dollars a year depending on your level of cover.

Landlord Insurance (Investment Properties)

If you’re renting the property out, landlord insurance covers things like loss of rental income, tenant damage and liability. Usually costs a bit more than standard building insurance, budget around $400 to $600 per year on top.

Strata or Body Corporate Fees (Units and Townhouses)

If you own a unit, townhouse or property within a strata scheme, you’ll pay ongoing strata fees to cover building insurance, common area maintenance, and a sinking fund for larger future repairs. These vary wildly depending on the building and amenities (a building with a pool and gym will cost more than one without), ranging anywhere from $2,000 to $10,000+ per year.

Maintenance

Things break, wear out or need replacing over time, from a hot water system to a leaking tap. A good rule of thumb is to budget around 1% of your property’s value per year for maintenance. On an $800,000 property, that’s approximately $8,000 a year, though in reality this tends to come in lumps rather than evenly, so it’s worth keeping a maintenance buffer in a separate account rather than assuming you’ll spend it evenly every year.

Property Management Fees (Investment Properties)

If you’re renting the property out and using a property manager, expect to pay somewhere around 5 to 8% of the rental income as a management fee, plus additional charges for things like lease renewals or advertising for new tenants.

Land Tax (Investment Properties, Depending on State)

Depending on the state and the total value of investment land you hold, you may be liable for land tax. Your primary place of residence is generally exempt, but investment properties can attract this cost above certain thresholds, which vary by state.

Case Example

Kristine owns an $800,000 investment property. Her rough ongoing costs for the year might look like:

  • Council rates: $2,200
  • Water rates: $1,200
  • Building insurance: $1,400
  • Landlord insurance: $450
  • Maintenance budget: $4,000 (rough average, some years more, some years less)
  • Property management fees (7% of $32,000 annual rent): $2,240

That’s roughly $11,490 a year in ongoing costs, on top of her mortgage repayments.

The Bottom Line

Owning a property costs more than just the mortgage repayment. Council rates, insurance, maintenance and (for investors) management fees all add up, and budgeting for them properly from the start means fewer surprises down the track.