I just thought of this !

If you buy a property you will need to get the insulation job checked out in the roof !

If he is in the Australian defense force and in NSW there is an new exemption for this
quote=colali]
 we will probably then move out and rent elsewhere and rent out the purchased property. This brings me to my question… borrowing money against the inherited house to buy our 'home' (hence eligibility for the FHOG) means that we can't claim tax deductions against the loan, because it's not specifically for an IP….
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Take out a line of credit facility in the other country for the deposit. As you will most likely not be able to secure AUS Loan with another property in a different country.
By taking loan in another country, however  you will be exposed to foreign currency risk.
A line of credit separates the loan with overseas existing mortgage so it can be easily identified as a loan for the deposit.
So when you change the use of the PPOR to IP you have a loan linked directly with IP purpose.

Only on the portion of  total yearly interest and yearly expenses for the remaining days left in the financial year. 
days left /365 * annual expenses (not sure on the foreign interest charges they are probably foreign expenses in the tax return ?)

There are more knowledgeable people on this forum who are mortgage brokers who may be able to confirm if cross security between countries is allowable or not and
whether Australian rental income can be offset against Foreign interest expenses in Net Property income/Loss on the tax return or if it goes into Foreign expenses in the tax return for a foreign loan.

Wait a while as I am sure other views and opinions will come from other Forum contributors.

If you just purchased the property and the fences were in a state of disrepair then when you replaced the fence you actually improved the fence beyond what state you purchased the property at. Thus it will be classed as improvement as another crazy grey area of Tax Law.
Ladybird is also correct in the entirety rule which is also another grey area of Tax Law also.
I had the pleasure of replacing the back fence a 12 years or older fence only to have the tree in the backyard drop a branch onto the new fence.
So I guess the replaced fence is repair as it is about 40% of the fence  –
and the repair is a repair though the tree damage.

http://www.mestateagents.com.au/blog/2009/11/recognising-the-difference-between-repairs-improvements-for-investment-property-owners/
See point 1.

http://law.ato.gov.au/atolaw/view.htm?docid=TXR/TR9723/NAT/ATO/00001
See section 1d and point 5
see section 59 -66

Your broker sounds like he is trying to get the lowest interest rate .
.
He is cross co laterialising the properties but he is correct in the professional package in giving you a lower interest rate on large loans over 500k but failing in listening to what is really important to the customer. Sounds like the broker has the thinking only of a lower interest rate is better. The broker will be worried that a bank or another lender will offer you a lower rate and he loses your business which happens a lot to brokers.

A line of credit loan against property one would be a loan of $33,000 so if you can get finance on 90% LVR for property two with 33k as deposit.

Ask your broker if you can set up a Line of Credit account (Loan) against the PPOR for the required security deposit for the next IP
With a $700,000 with 14,000 owing LVR of 80% for LOC is $546,000 you should be able to borrow however the income limitation will lower this but a 20% deposit should be enough. As an example a $700,000 IP required on next property purchase then $140,000 line of credit loan against PPOR and $560,000 loan against next IP.
Some lenders take into account the rental income you will get from the $700,000 new IP , some lenders may take a percentage of this expected rental income into account.
Your Mortgage broker should know which lenders on their accredited lenders panel might accept future rental income into the loan approval process.
This may not be able to be done if you can't service the $140,000 Line of Credit , $300,000 loan commercial and the new IP mortgage with another lender ( make sure it is not the same bank as PPOR Loan) !

Another point I just thought about is if you can get the loan needed by CC you have to borrow the same amount of money so servicability shouldn't be a problem via a LOC

Hope this sheds some light on the loan structure.
.

Thanks John for listing those
I also noticed a vacancy rate list in the back of API magazine for FEB 2010

Haven't done any development myself but these are the most likely insurances you may require

Are you having people work on your land ?
Yes then you need Public Liability insurance as if they get injured you could be liable.

http://www.strathearn.com.au/OurServices/PropertyDevelopment/tabid/133/Default.aspx
You may need to insure the construction on it
http://www.buildersbroker.com.au/
http://www.insurancecompared.com.au/explained/other/construction-ins.php
You will also need to insure the workmanship of the construction
see
http://www.realestate.com.au/renovate/building/articles/builders-warrenty-insurance.htm
Hope this helps you in your quest some other forumites may come up with other suggestions.

Buy something at less cost. If it is an investment you do not have to live in it
You could buy in a cheaper area and pay it down to a point where expenses = income
This is the hard solid savings part.
Live with parents for longer, dont buy expensive depreciating cars, work during tafe / uni rather than getting study allowance, save your AR$# off to get that deposit – It will be worth it in the long run.
What really kills is trying to pay off a huge mortgage. A smaller mortgage can be paid off really quickly and then the property doesn't cost you to keep owning and renting it out.
As an example
http://www.realestate.com.au/cgi-bin/rsearch?a=o&id=105643754&f=20&p=10&t=res&ty=&fmt=&header=&cc=&c=60385599&s=vic&snf=rbs&tm=1267005338
Costs $75,000
So you need stamp duty costs of $2000 plus 7500 for deposit plus $1300 probably for LMI plus $1200 for legal costs.
So $12,000 you need to save up (some cars cost more than this !, some people owe this on their credit cards)
Loan of 67,500 repay over twenty years of at 10% interest rate is $150 a week
Now unfortunately you need to have a job or proof of income to convince the bank to lend to you $67,500
Now put a tenant in it
at say 3% yield is $43 a week
hang on this earns $120 a week in the ad thats 8% yield
lets say 40 a week for expenses thats $80 a week
So now you need $70 a week to make the repayment
Lets say you decide to take your lunch to work with you hey there's $70
Lets Pay an extra $70 a week towards the loan.In 229 repayments (4 and a half years) you have a property that costs you nothing to own when rented based on 10% interest rate.
In seven years at this rate of repayment its paid off.

Lets Pay an extra $140 a week (so total out of pocket $210 a week) towards the loan.In 140 repayments (2.6 years) you have a property that costs you nothing to own when rented based on 10% interest rate.
In six years at this rate of repayment its paid off.

Interest rates are not at 10% but it is a good figure to allow for interest rate increases.

The point is you have to start somewhere and how good would it be to have a property paid off worth at least 75,000 that you can then borrow against for the next investment property.

Are you referring to the negative gearing possibility. Where rent income is less than all the expenses incurred to produce the rental income ?
If so if you buy in May you are going to have to wait until Settlement before you can rent it out. And you can't claim expenses unless it is rented out or available to be rented out .Settlement usually is 90 days.
So if you rent it out it might also take time to find a tenant.
If you buy after financial year you may have to proportion income and expenses for the first year. So say you rented it out for 300 days in 2010/2011 financial year then you have to part claim 300/365 * annual interest
You need to keep a record of when it was rented out for your accountant and check it out with accountant.

If you can rent it out before June 30 you might be able to pay interest in advance for the next financial year.
http://blog.mytaxzone.com.au/2009/06/paying-interest-in-advance.html
Good point to talk to your accountant about Too !

G'Day Mate!
Welcome to the forum

http://www.apimagazine.com.au/
Would be a good starting point
also
http://www.businessmall.com.au for books on investing in the Australian Market