Ok, I guess we'll just focus on paying down the loan a bit more for the time being and maybe prices will come down and we can jump in again

My second question would be, which areas of Aus can I find a + cashflow IP ?

I've heard the UK market is starting to recover, should we be looking overseas instead?

Thanks for the help Jamie.

So loans 1 and 2 are from the same bank right? Or can loan 2 be from a different bank? Must they send a property value assessor to the residence first to obtain the current value?

"Second loan split for the equity release" ? I don't know what that means?

When you say, "deductible", you mean tax-deductible right?

So what exactly is the deductible part of the "equity release for IP deposit" loan? The interest on that loan?

So where would you say is a good place to invest in Melbourne? The outer suburbs?

I still think anywhere in the west is a good buy, no?

Also, although these companies may move out from the CBD, the cbd will always be there and being close to it will surely always be better than being further away no?

IT has been painted and new stove and aircon/heater installed. It also has a separate toilet to the bathroom.

Yes it can be improved, the spacious lounge could be turned into a 3rd bedroom with the addition of a wall making a hall way entrance with kitchen on left and bedroom on right. Kitchen could become living room to eat meals in as its quite a spacious kitchen.

How much is it to install a simple 5 metre long wall? 

Then we'd rent it out as a 3 bedroom flat, at $130 per person (very cheap rent considering its within 10km of cbd I think), thats $390 a week and $1560 a month. Mortgage repayments are $1500 a month so that means it would be positive geared by $60 a month right?

How much equity would a 3rd bedroom add?

@thefinanceshop

Thanks for the response.

When you say heavily negatively geared, you mean the rental payments do not cover the mortgage right?

It will be owner occupied for the first year (it has to be since we took the first homebuyers grant) but then we may rent it out and move out. There is the opportunity to convert it into a 3 bedroom (turn the living room into a bedroom) and possibly rent it out at $400 a week (3 student tenants at $130/week would be easily achieved in melbourne I think) which would make it 'positively geared' right?

There are tax benefits to having a negatively geared property aren't there? What are the benefits of a negatively geared property?

We have looked at the capital growth potential, and we found that the western suburbs probably offer good potential over the next years as the government is investing in the west. We could not find a 2 bedroom unit in melbourne anywhere for under $300k except in the west. It seems to be the cheapest option, and as the past has shown us, the cheaper and less popular suburbs of melbourne have shown the most capital growth over the long term right?

Where can you buy a positively geared property in melbourne?