Cost Of Owning

Despite our chances of getting the house being very low, we decided to take a gamble & make an offer for it. We don't lose anything anyway. If seller decides to award us & the finance part of it is successful, we'll have our own place. If it doesn't, we'll be refunded our deposit. If the seller decides to award to somebody else, we don't even have to pay deposit. It's definitely a good experience & the knowledge that we've acquired will surely come to good use in the future.

We met up with the agent yesterday after work. He could only make it at 4 pm & I had a list of 16 surgeries to do. Even though the surgeon is very fast, I have no guarantees that he would be done by 3 pm. So I told hubs to go ahead if I couldn't make it. Time end for last case was 3.05 pm. By the time I'm done cleaning & locking up, I signed out at 3.15 pm, made my way to the carpark & shimmied with the morning shift ward staff getting off work. I managed to get to the agent's office with 5 minutes to spare. Although the information of what others have offered is confidential, up front, he told us that our chances of being awarded the house is very low. Including ours, there're a total of 5 offers & they have pre-approval from the banks while we don't. He suggested an old villa unit in Tuart Hill asking for $409k to $419k. He said that it's very close to the city & the value will surely go up more than the 1 in Ellenbrook ever will. There're no offers as yet & he's pretty sure the owner will be willing to consider $399k. Hubs is adamant about his choice & on my part, a $350k loan is the highest I'll go. He said if we're going to pay $399k for an old villa that requires renovation, we're better off buying a turnkey villa which construction is due to start in Ellenbrook that is selling for $379k. I think hubs loves Ellenbrook.

I managed to get some of my questions answered:

1. Strata fees are applicable to villas or units & is on top of council rates (aka shire rates) & water rates. But paying strata means that you don't have to buy your own house structure insurance coz it's covered (home contents insurance is still your own responsibility though). Exterior maintenance, lawn care if any are covered by the strata fees. Generally around $1.2k mark.

2. Council rates differ from suburb to suburb. It is based on the Gross Rental Value (GRV) of your property. If the GRV goes up, your council rate will go up. Same for the reverse. You have to pay an Emergency Services Levy & Rubbish Service as well. For both the Ellenbrook & Tuart Hill 2x1 that I've seen, council rates comes to about $1.7k. I've seen on FB people paying over $2k for their property.

3. Water rates are generally around the $800 mark.

So if you're looking at a villa or unit, you're looking at around $3.7k per year on top of your mortgage. If it is a house, it'll be around $2.5k if you're not taking up a structural insurance (I'm told this is roughly $800 a year). Divide it up & we're looking at an additional of $200 to $300 per month. That's the cost of owning your own place. Bills (bills come bi-monthly) depend on your usage but so far our electricity is about $80, water about $20 during winter coz reticulation needs to be switched off totally & about $80 during spring to summer. These bills are pretty constant & varies by very little. Gas is the most erratic 1, due to the amount of cooking I guess. I've paid between $60 to $80.

Renting is cheaper. You'll save $2.5k to $3.7k per year compared to owning your own place. But if you don't have the deposit, you don't really have a choice. At my current rental of $430 a week, I'm blowing off more than $22k per year. This is money that could have been paying off my mortgage. But of course, having another year to save will be ideal. No guarantees I can meet the 20% deposit but 10% is definitely possible provided the property prices don't go up. It's alright. Be it near or far, it will become a reality without a doubt.