Some lenders now re-check your employment status just before settlement (ie they call the HR/Payroll department and check you are still employed there with no pending resignation).  Wait till you've settled.

Negative gearing means you are making a loss.  Sure you get some tax rebate on your loss, however you don't get all of your loss back.  Further, you get nothing at all back if you do not have some other income to gear the loss against.

Let's say you lose $10,000 in a particular financial year on this property, and let's say that because of your day job, you are in the 37% tax bracket.  The most you can hope to get back from your loss is 37% of $10,000, which is $3700.  So sure, you got a tax refund of $3700, but you lost $6300 (ie $10,000-$3700). 

A loss is a loss is a loss, and negative gearing is a LOSS.  Anyone that tells you that you need to get yourself some negative gearing is not speaking with your best interests at heart.  You will have to continue supporting this property financially for a few years until the rent in this property can be raised to a point where it covers its own costs.

May we ask where this property of yours is located, and also I am interested in knowing how you decided there will not be much in the way of capital growth in the foreseeable future?

Hi Dark Knight

Have I understood correctly… you are prepared to put two hundred thousand of your chips on the board for a return of only $33 a week?  That is a return of less than 1% per year.  (33 x 52 / 200,000) * 100  = 0.8%.

You would be substantially better off simply putting your money in a term deposit or high interest bearing bank account, if your aim is cash flow.

Alternatively you could split your $200k into three piles, buy three houses (with say an 80% bank loan) that are cash flow neutral or thereabouts in year 1.  In year 2, whack the rent up say $20 each per week.  That's a $60 per week return.  Already better yield than the studio apartment.  In year 3 what do you do?  That's right, you put the rent up again.  And so your yield goes up.  This is just a glimpse of the cashflow side of the argument.  Not even bothering to look at the capital growth situation or the re-saleability of the dwellings (you can resell houses to investors or proud home owners that are foolish enough to overpay because they just love the place.  A studio, you can pretty much only sell to hard-nosed investors who are never interested in overpaying).

Definitely don't mean to offend with my points… just to be blunt enough to get you thinking outside the current frame of thought and consider the other options

Is a 3 month wait really that bad? 

Agreed – AAMI is great.  They won't insure all kinds of properties, but I use them for anything that they will insure.

Exactly .. you have to demolish (which requires a permit which costs, and the demolition contractors which also costs).  Also permits for the rebuild are needed.

The 4-pack was and still is all the one title… it settled 2 years ago.  Not sure if CBA has changed their offerings since then.

I've got a 4-pack (units) financed with CBA under a residential loan. With CBA, 4 or less is resi, 5 or more is commercial.

That's exactly what I'm saying, yes.

Normally it goes like this:

Make an offer, whether it be verbal, via email, or written on a piece of paper and handed to the agent.

If offer accepted, get the agent to insert your special conditions into the contract and give you a copy (a scanned and emailed copy is fine).  One such condition can be "A deposit of AUD$4000.00 is payable with 21 business days".

Get your property lawyer to look over it and give you the thumbs up

You and the vendor both sign.  Be sure that the bit that says "this offer invalid if not accepted within x days" specifies a suitably short space of time (I always do 1 day) so the risk of someone else coming in and taking the property from your control is minimized.

Once you have both signed, you would hand over a holding deposit such as $500 to the agent and get a receipt for it.

You then immediately give a copy of the signed contract to your mortgage broker (or bank if you are going direct) and also to your property lawyer.  Scanned copies are fine.

You then work your way through your special conditions, such as getting building and pest inspections.  Your lawyer will assume that if you do not contact him/her to announce you need more time for a certain condition, or wish to pull out due to a certain condition… that you are happy with everything.  Silence is considered to be "that condition is fine and ticked off."

When you get your finance approval, you would provide a copy of the approval letter to your property lawyer.

Within 21 days you need to have paid the balance of the $4k deposit (so if you already handed over $500, you hand over the remaining $3500) to the agent.  Again, get a receipt.  Scan the receipts in and send them to your lawyer together with an explanation that you have paid the deposit.

Stay in contact with your lawyer and be sure when you are both clear that the contract has "gone unconditional".  At this point you cannot get out of it.  Then there is not much else to do except sit around and wait for settlement.  Except of course ensuring that any further monies towards the deposit and stamp duty that the mortgage provider will not cover, are either paid into your property lawyer's trust account, or that you are in regular contact with your property lawyer from around 2 weeks before settlement, finding out the exact plan of how that outstanding money will be paid.  Quite often it is you scurrying around the day before settlement getting a bunch of bank cheques ready.

Does this help you?