Terry Ryder http://www.hotspotting.com.au does various reports including 'Boom Town' reports. Dymphona Bohault (sp) recently produced a 5 set series of Boom Town reports.

I might add the resource world has changed a fair bit since most of those reports were produced so extra due diligence is required.

Hi Joel,

Without more information it is difficult to respond with any degree of certainty to your question. Some more information would be useful.

Some companies suggest investors put all of their rent into their own mortgage and then let the interest on IP loan capitalise.

The ATO disallowed this strategy sometime ago – a read of the Harts case will enlighten you on this one. In effect the Harts lost their case because the intent was to avoid tax (this structure was market as a tax reduction system) and thus they got pinged under Part IV of the tax act.

The original Harts Case was lost on intent – since then a number of people used 'other reasons' to set up similar structures. Earlier this year the ATO again ruled against this strategy. The ruling also extended to structures where rental income was placed in offset accounts and/or lines of credit and swept at the end of each month in order to hasten t he paying down of any home loans.

Not an accountant so you would need to check this with an accountant – or wait for one to come along here.

If you do go back to MA make sure you get your consultant to detail what exactly they are proposing. I might add it would be interesting to note whether or not your consultant is a qualified tax advisor.  

Hi Merahma,

I am always cautious about property sold with tax incentives as the big carrot. A key question I would ask of myself if I was looking at a NRAS is – would I buy this property without the NRAS incentive?

If the answer that question is 'no' then move on and find something else.

HI have had a couple of experiences with NRAS property. The most recent was when we were approached by a company who had some NRAS stock to sell. They were offering 8% marketing fee. Something is 'not right' when high marketing fees are involved so we ceased conversation.

Be interesting to see the whole equation. Does the debate consider all ongoing property costs such as rates, insurance, repairs, etc all of which are borne by the land owner?

The other point seemingly overlooked is that interest rates are very low at the moment – what happens when rates increase by 0.5% – how many suburbs fall off the report on that basis?

For some of those suburbs it could well be an 'at this point in time' argument.

Hi Merama,

Financial planners/advisors are not qualified to advise in property. Their training and qualifications do not extend into direct property investment advice.

Before you go too much further you would benefit by spending sometime broadening your knowledge and understanding of what is possible in the property field.

In the meantime it is advisable for you to find a good mortgage broker and accountant who can provide you with expert advice in their respective fields, borrowing money and loan structuring and tax planning.

I would also suggest you consider speaking with a good solicitor who can assist with asset protection etc.

You don't say which state you are in but I would recommend Terryw as a good point of contact. While Terry is based in NSW he is a broker, solicitor and is currently studying his accountancy. (I hope I managed to keep up with all of your studies Terry). You can do a search of Terry's posts on this board to see how broad and detailed his understandings of these key areas are.

Some other authors you may wish to explore include:

Jan Somers

Peter Spann

Michael Yardney

John Fitzgerald

I got something from each and everyone of them.

Others speak highly of Margaret Lomas books.

Terry is like a scratch marker in a handicap race. He'll get there – it is just a matter of time.

I might add this forum is better for Terry's contributions.

PS Others count too.

Hi Songrad,

If you do intend self-managing make sure you know the tenancy laws of the state the property is located in. Many state government consumer affairs type sites have the information you'll need. 

You will need to provide each tenant with an incoming property condition report. The tenant will compare this report with the property and make amendments as required. Any Bond dispute will be based upon what is written in the PCR so accuracy and attention to detail is required. I would also recommend a photographic record be completed.

Some state government sites have these forms available online.

Managing your own property while things go well is fine – make sure you are prepared in case things don't work out so well.

As wayno has said a Quantity Surveyor can do a depreciation report for you. There are a number of companies around who will do the job for you. As you are renting the property from settlement date you can organise your QS report pretty well straight away. They take about 6 – 8 weeks to prepare and you can use the information to assist tax return preparation and also for your PAYG Tax Variation, if you are using this strategy as part of your overall approach. 

If you have plenty of equity – why not a fire sale?

Not naive – just need to consider the whole picture.

While your capital growth calcs make sense. It does depend on what ILIKE is trying to achieve. His (?) earlier post suggest 'income' is the greatest focus.

So if we explore further your possibility we would need to consider income V costs.

Costs would be approx $91K for loan interest and $17K (allowing 1% of purchase price) for other costs giving a total of $108K in outgoings.

To outperform the current return of $850/month (gross) ILIKE will need to purchase property with minimum rent return of 7.15%

EDIT — some rough maths being applied so further due diligence required.