http://www.greyarmy.com.au
http://www.jimsbuildingmaintenance.net/html/s01_home/home.asp

I know this firm can do most of the work as I got a quote for this type of work recently
http://www.hireahubby.com.au/

You can't claim the cost of renting another house you live in off the original rental home income.

Is it in your interest to get a tax deduction. What is your marginal tax rate. Is it 30% if it is you could pay 30% tax on the first property income and use the 70% left over to help pay off another home loan for the next house you live in.

Or live in the bigger house and rent out the new smaller investment house loan and pay it off with the rent you are not paying or loan repayments you are not paying on the first house you have paid off..
(When you have a house paid off you can get an equity loan against it to cover the deposit for the second investment house. )
(or use first house and second house combined as security – more risky as you can lose both houses if you get behind)

Old carpet covered floors keep on floor while painting then replace after painting floor.

If plumbing needed it has to be done before you put the tiles , wall coverings , plaster board , ect  on to walls as access is required by the plumber and damage can be done to walls. Check with plumber and electrician as to what they need to do to the walls before doing work on the walls.

Give hbbehrendorffa brake as yunger peepal spel stuff a lot wurse them im. Its gr8 4 ow society that yung peepals can spell stuff so gr8 . OMG if u think he has problems spelling look at watt the yung under 24 year olds type like .LOL

Usually one suburb goes ballistic and when it becomes too expensive to buy into people then buy in the neighboring cheaper suburb.

No you can't do this . You have to have a direct nexus(connection) with the property that produces income.
What you are thinking of is when the expenses are greater than the property's rental income and you make a net property income loss that can be offset against other income such as a wage from a job each tax year.

What also is a rule is you cannot double dip
So if you had been claiming expenses against rental property income you cannot then try and claim these expenses against the cost base for capital gain purposes.
However you have not claimed against income and can add the holding costs onto the property to reduce you capital gain.

see the third element of cost base at this web site
http://www.ato.gov.au/individuals/content.asp?doc=/content/36557.htm&page=2&H2
and also the point of

You do not include costs if you: (direct quote from ATO)

see end of second element part for double dipping

see this example as it is similar to your situation.
http://www.ato.gov.au/individuals/content.asp?doc=/content/36902.htm&pc=001/002/026/017/004&mnu=&mfp=&st=&cy=1

if you make a capital loss you can only claim this against other capital gains now or later on .
(not sure on how long you can carry the loss to future tax return years)

Check if you can claim a capital loss while adding 8 years of holding costs to the third element of the cost base with your accountant

You are partially correct but there are other factors used to determine if this is your main residence see ato web site for some of these other factors.
http://www.ato.gov.au/individuals/content.asp?doc=/content/36883.htm

if it is an auction I reckon $720 k as that seems to be what is happening in Melbourne auctions

Your net property proceeds is equal to
rental income is $14755 – (half interest costs) – (1/2 council rates) -(1/2 water rates)-(1/2 insurance costs) -(1/2 depreciation costs)-(1/2 repair costs)

Troy's net property proceeds is equal to
rental income is $14755 – (half interest costs) – (1/2 council rates) -(1/2 water rates)-(1/2 insurance costs) -(1/2 depreciation costs)-(1/2 repair costs)

Not necessarily as you have to factor in all expenses incurred in earning rental income including depreciation which has two forms of depreciation – fixtures can be claimed and depending on the age of the property building costs could be claimed and then fixtures can be also claimed.

However you should not purchase an investment property based on a tax deduction.
As an extreme example say you did have a net loss of $8000 a year after calculating rental income – expenses
Extreme hypothetical example of $8000 negative gearing scenario which is not what you have got.

Troy earns less than 80,000 so the marginal tax rate is .30c so say you had $8000 you could claim as an example
So troy paid $8000 in interest to get back $2400 as a tax return. out of pocket by $5600
and for your case
You paid as an example say $8000
You earn nothing as in this example net property  income is minus $8000
Tax on no previous income is zero
So you pay $8000 to get back Zero.

Now you visit the family office to get a Family payment as part of this example

Family office and centrelink add the 8000 loss back onto your incomes to work out deemed income for payment calculations.
Now remember that troy has actually lost $5600 dollars but centrelink and family office say no you actually earned the full gross income by adding the loss back to troys taxable assessable income.
You now have a deemed income of $8000 according to centrelink and family office even though you are actually $8000 out of pocket as you couldn't claim back money.
Point to remember if you are a parent as well !

The bank will most likely lend to 80% LVR on your existing investment properties. (and you need to be able to service the new total debt amount)
Also if you go for another loan the new lender will want to know your existing debt and will factor this with your income so see if you are able to service the new loan.