Think about where you would live if you found yourself a Gen Y person without assets and struggling with the cost of living.  What would be the first budget cut you would make?  Food?  No?  Hanging out with your friends sometimes?  No?  Medical care?  No?  Car?  Jackpot.  It's a big expense that you can avoid if you live near the facilities you need.  This does not necessarily mean you have to be within 5km of Melbourne CBD.  Perhaps in a fringe suburb of a major regional city.  Either way, near shops, public transport, and not silly distances from employment if it applies to your demographic.

I've got a house smack across the road from the shopping centre in Corio and my tenants cheer "look at the location!".  They do not need a car because the shops and the doctor's surgery are across the road.  A few footsteps from the front door is the busstop so they can go into the centre of Geelong to the cinema, more shops and so on if need be.

Hi Donavan,

Sure.

The accountant I used to set up the SMSF for me (and the bare trusts required by the lender at acquisition stage) is:

Douglas McCracken-Skeggs

He can be found at the office of Ron Skeggs and Associates, 275 Geelong Rd, West Footscray 3012, tel 9687 0933.

His email address is [email protected]

Douglas also does my SMSF's annual tax return and audit. 

For the SMSF mortgages, Richard Taylor, who has already posted on this thread.

Both of these boys drove the process to perfection.  They are gems.  Very tidy, no unexpected surprises.  In fact it all went so well that on settlement day of SMSF IP # 1 when the solicitor called to advise settlement had gone through I was like "Really???  Are you sure the State Revenue Office or the Land Titles Office didn't stop us dead in our tracks?  I thought this SMSF stuff was supposed to be a minefield!"  Both Doug and Richard are extremely across the SMSF rules and keep you in line.

For what it's worth, I did a lot of digging around and specifically decided not to go with one of these "hey we are great we bundle it up for you and it will all be very easy" mobs on the internet.  On the surface, it all sound wonderful.  But.  Things can get nasty expensive down the line when you just want to ask a little question, or your tax return is not a text book case.  There are folks out there pretending setting up and managing SMSFs is way harder than it actually is, and charging clients a fortune to shield them from it all.  Hmmm. 

Be very aware that if you get someone to set up your SMSF and they do not do it properly, it is very expensive to fix it, and you'll struggle to find a proper accountant who is prepared to clean up the mess for you.  You'll be in what is known as no man's land.  Whatever you do, go with an accountant and broker that others have used successfully.  Take recommendations ONLY from people who have set up their SMSF, bought and settled on at least one SMSF property, gone through at least one SMSF tax return and audit, and whose SMSF has been open at least a year.  Such people will by that stage have seen and understood all the phases, and have seen what kind of fees ASIC and ATO issue annually.  Any issues with accounting or mortgage broking would have been fleshed out by then you see.  It would be my recommendation that you only go with arrangements where the one person is your accountant – not a random assortment of fifteen people that pass your file around like a hot potato.  You need one person to be clear on your goals and circumstance and provide suitable advice accordingly, and you want every bit handled by that person (who should be a fully qualified accountant who is experienced in SMSFs that buy property).  You don't want work experience kids, assistants, or anyone that is not your accountant touching your SMSF at any time.  You do not want mistakes, you want a squeaky clean SMSF

Cheers!

Hi Donavan

For under $70k I got a SMSF set up and funded the deposit and stamp duty on its first property.  For $110k you'd be able to set up, buy one place, and be close to having enough funds to buying the second.  Further they will well and truly have paid themselves off by the time you hit retirement age, at which time you can choose to use the rent as income, or sell one or both free from Capital Gains Tax (ie pure profit).

You need to ensure you have an accountant and mortgage broker on board both of whom do these kinds of setups all day long.  Piece of cake.  Don't be someone's guinea pig while they try to learn the ropes.

Feel free to drop me a PM if you like.

Happy New Year to you guys too !

I think you mean property ladder ?

I would be very wary of a financial planner that did not already know the rules surrounding the topic of renovating inside a SMSF without having to go away and research it. 

As the boys have mentioned, your SMSF cannot borrow money to do a reno.  So if your SMSF has money in its bank account, great.  You do of course need to ask yourself if this is the best use of the SMSF funds.  Either way, as Terry mentioned… you cannot change the nature of the asset…. so for eg you cannot subdivide off the back yard, or convert a house into two dwellings.  From what the ATO told me, a cosmetic reno is fine, as is converting a room to a bathroom.  I even read in a mag recently that a SMSF can add a granny flat to the backyard (presuming it has a large slushy fund to fund such a venture).  If in doubt, ask the ATO for a private and binding ruling.  And perhaps look into getting an accountant or financial planner on your team that already knows the answers to these questions.   Richard and Terry have both already replied to you and know the rules inside out.

Costs are claimable from when the property is advertised for rent. Keep a record of the gumtree ad…

From the ATO website:

"You can claim expenses relating to your rental property but only for the period your property was rented or available for rent, for example, advertised for rent"

http://www.ato.gov.au/content/00313893.htm

There are three very highly respected mortgage brokers on these forums that would sort this out for you in a heartbeat.  Pick one and give them a call.  Userids are Jamie M, Qlds007 and Terryw

Yep get an awesome broker on board.  Pick from any of the following three gun mortgage brokers on these forums.  Their userids are Qlds007, Jamie M and Terryw.

Hi Yoly

Nobody but you can decide where to buy.

Some people are capital growth buyers (buy, hope that the value will increase).  Some people are cashflow buyers (buy property that fetches rent sufficient to cover the mortgage and bills).  Some people expect their properties to be a balance between the two. 

The general things to think about are:

1. Follow the infrastructure.  Look at where the government is doing things like building new freeways or rail, which makes it more appealling to live in the area due to accessibility.

2.  Don't dig yourself in too deep.  No point buying something praying for capital growth to save you if you cannot afford the bills while you are waiting for the growth

3.  There needs to be employment in the area so people can afford your rent

4.  There should be demand.  You don't want to buy into an area that has loads of properties available for rent but not that many people looking for a rental to live in

5.  Try and be within a reasonable commute of a major city or major employment centre

6.  If you plan to buy regional, you generally want to look at buying really close to the town centre.  So no more than a 2min drive away, presuming you get no red traffic lights.

7.  You want places that have things nearby such as a university, a hospital, and a few major employers.

Take a look at the rear pages of the Australian Property Investor Magazine for some statistics to start zeroing in on places you might fancy investing in.