Nice post Taylor, full of accurate facts

Yes I also thought double digits was an exaggeration. None of mine went up by a factor involving double digits.

Yes have to say, that is three times the council rates on properties I normally buy. 

Hi again, just to be clear, it is neither a fantastic deal nor just OK.  It is a terrible deal.

Hi Milliet

$13k is a ludicrous amount of money to be charged for the sourcing of what is essentially just a normal property.  If it were a fee for sourcing a development site that was expected to spill out a huge profit, perhaps it might be a different story.

If you are talking about Newport VIC, it is within a shortish distance of Melbourne CBD (and in train zone 1) and as such will always attract buyers and tenants.

That said, the property that you are proposing to buy will be negatively geared even after you renovate.  This is not awesome at all.  It is a million percent incorrect that this is the closest you will get to being neutrally geared.  A million percent incorrect.  I find properties every day of the week that are neutrally geared, and which you don't have to bother renovating (and in areas with strong growth and tenant demand).  Someone's taking you for a ride there.

Negative gearing means you make a loss.  Even after you do your tax return, you don't get a refund on the entire loss.  So it's still a loss. 

$400 per quarter seems a staggering amount for body corporate fees – even considering that it covers the building insurance.  Let's assume that the building insurance component is $800 (which is a lot for a unit), there's still $800 that you are paying the body corporate for "managing".  Is there communal lighting that is being paid for?  A gardener?  Or is the entire fee going to the Body Corporate to put in the big effort of renewing the building insurance every year?

You have to be careful of body corporates.  The BA should be watching out for problems on your behalf.  I saw a property the other day which the body corporate had underinsured by a disturbing amount.  This is a huge risk exposure for everyone involved.  Particularly when the remainder of the complex is owned by one person so you'd be just one owner with one vote towards body corporate decisions.  You'd have zero power towards getting the place suitably insured, or deciding who is the Body Corporate Manager.  Fees can escalate wildly out of control and there is virtually nothing you can do about it.  Needless to say I walked away from that property.  Shame, it was quite nice.

Negatively geared properties can hinder your property investing goals, making it much harder to demonstrate to a lender that you can support a mortgage on the next investment property.  Tread carefully, don't just blindly do what someone else tells you to do simply because you are paying them a fee.

Don't you worry JP, Aunty Julia will happily dish out benefits. 

Argh so tempting – it takes all my restraint to not spill the beans on some of the cracking locations I've been sniffing around lately 

What are you trying to achieve by putting it in both names?

Yeouch. Nothing like a case study to drive the point home.  Nice one for sharing Terry

Hi Jay

I am unclear why you need to wait for your lawyer before merely making an offer. 

(You would get your lawyer involved in nailing down the exact contract wording before you sign the contract of sale.)

As Jamie says, your offer should be for an exact figure, and should mention any conditions you intend to be applicable.  For instance you could say "subject to 60 day settlement, buildng and pest, and 90% finance" and if they accept your offer you would work with your lawyer to get some savvy wording to describe the building, pest and finance clauses.

Hi acurabot

The short answer is no you cannot get profits out of a SMSF before retirement. 

Also a SMSF cannot borrow money to make improvements to a property.  Even if the borrowings come from you yourself.  So if you gave your smsf money to renovate, it'd be just that.  A donation.  And the profits would belong to the SMSF when the property is sold.