Thanks for you advice as it is really clearing a few things up for us.

This is what we have come up since joining this forum and with the great advice we and opinions we have received!

The cost of the house is 325k – around 340k with stamp duty and legal fees (rough estimate)

20% of 340k = 68k – this will be the deposit on the house and should leave us with 53k equity in the house?

68k – 78k = 10k which we will then put into the offset account

if we lock in the interest rate with st george (example only) for 3 years we will be locked in at an interest rate of 6.54%

325k (price of house) – 53k (deposit) = 272k – 10k ($$$ in offset) = 262k (amount we will be charged interest ondue to 10k being in the offset acc)

the amount we will be paying back each week will be as follows IF my calculations are correct:

262k (offset amount), locked interest rate of 6.54% over 3 years paying interest only = about $356.98 – rent of $380 = positive gearing of $23 right from the start???

Is this a good place to be starting off at??

To be honest there is nothing that we can do to the townhouse to increase its value or rental income at the time being due the place being in quite good condition already and i cant see it increasing too much in the next few years although who knows!

Given the above figures and considering they are correct….  do you think that this would be a good start to our portfolio??

Thanks again as i never thought i would be coming up with equations like the above 1 night after being on this forum!

We are thinking about purchasing a home to live in which we would take a 500k loan which will cost us around $950p/w in repayments.

Our rent at the moment is $355 p/w

If we were to put out savings into the investment property i have talked about in the above post then we will use our savings and borrow around $261k – rental return on this property would be about $380p/w which would cover the weekly loan repayments if we were to pay interest only (not sure if this is a good idea – paying interest only – any info on this?)

From what i have gathered – we will be paying nothing in the loan repayments (maybe $30 – $50 at a max between us both) while renting as well – we would have also paid off about 64k off the rental property which is advertised at 325k meaning we would have 64k in equity right??  could we then borrow against this equity and then buy a home to live in?

I think IF we were to buy a home first the banks may reject an application for another loan IF we were to apply for one to get this investment property but i think IF we were to get this investment property first our chances for a loan for a home where we reside in would be better??  meaning the outcome of this scenario would be that we have an investment property where we pay next to nothing or literally nothing in home loan repayments and then just pay off our home loan??

thanks for your post and i look forward to hearing more from you

regards,

Rookies