Alrightey.

Firstly, if she has already paid some kind of bond, you can't ask her to top it up.  Sadly it doesn't work that way.  Eventually the bond held for a long term tenant looks so small it would struggle to buy a Mars Bar.

Secondly.  I agree – don't subsidise people.  I'm happy to be flexible on perhaps 5 or 10 dollars per week to save myself the headache of changing tenants to an unknown person, but that's it.  Remember that $10 a week is $520 a year.  You get the idea.

Thirdly.  Department of Housing.  I'll tell you right now that this lady could stop paying rent, trash your place and sell drugs from it, and you will never ever get to keep a penny of it if she has gone through Department of Housing.  It's yet another crappy outcome of VCAT. 

The above doesn't really matter anyway – if someone trashes your house a lot, the bond would not come close to covering it anyhow, and it would become an insurance claim regardless.

Bottom line is, yes, if you have a genuine great tenant on your hands excellent, but don't reward too many dollars per week for such greatness.

Damages will be covered by insurance provided you're suitably covered, so don't get sucked into the thinking of "oh my word, if the tenant doesn't pay rent I'll get no money" line of thinking.

You are a business, not a charity.  If this lady is in a spot of bother financially, newsflash, she can get Newstart Allowance and Rental Assistance money from Centrelink.  Get online and find out how much, and you'll see how comfortably a person can live even on benefits.  No need to discount your property a great deal.

I agree with this one million percent.  The stress of having their home sunk bank into debt would probably kill them. 

It is a bad idea to pay off the loan.  Leave the cash in the offset account.  Here is why:

Let's say you outgrow your house and want to move.  Let's say you want to convert your current PPOR into an IP and buy another house to act as your IP. 

a) if you had left the cash in the offset, you simply withdraw it and go shopping.  you leave the bulk of your overall debt on what is now an IP so the mortgage interest is deductable.  you take as much cash to the new ppor as possible as this is non-deductable debt.

or

b) let us now suggest you were silly and paid down the PPOR.  no worries you say.  i'll redraw, or take out a secon mortgage against the old PPOR to fund the new PPOR.  of course you can do this, but.  Because the PURPOSE OF THE BORROWINGS is to buy yourself a PPOR (which is NOT an IP), the interest on the borrowings will not be deductable.  so in effect, you have now achieved buying two properties, and cannot deduct the mortgage interest for either of them against your tax return.  Oops.  bet you're wishing you didn't pay down the house mortgage now….

I would love to know the answer to this too.  Anyone?

Look at the rear pages of API magazine.  The capital gains performance of many inner Geelong suburbs have outperformed Camberwell over the past decade, and also offer almost double the rental yield.  The numbers have spoken.

No, but I've certainly heard of it being done before. Perhaps in your unit development you could propose that in that area, it will be only driveways and parking areas anyway, and not built upon with dwellings.  That way if access was required by council for something or other, it wouldn't be a major big deal.

Um…. selling is not the only way to realise profit.  Refinance and/or leverage equity to use as deposit for yet another place is a means of realising your profit.  And you don't have to pay capital gains tax because you ain't selling

I've implemented this strategy.  The vendor was so blinded by an obsession with wanting a particular price, the offer was immediately accepted with little attention paid to the fact there was a 6mth settlement attached

I said I'll give you $x in 90 days or $z in 180 days,….. in both cases "subject to finance, building and pest and all the rest of it".  I didn't even bother to clarify what I meant by "and all the rest of it".  It was a verbal offer and was accepted verbally, and my solicitor and I then rammed a heap of clauses into the written contract.  The vendor signed it.  Done.

How long would it take you to save the extra $30k plus the extra tiny bit of stamp duty?  Would a longer settlement give you time to come up with that extra cash?  If so, try offering them two offers at once.

Offer 1:  $300k, 6 week settlement
Offer 2:  $330k, 180 day settlement (don't say 6 months, it makes it sound like a long time.  say 180 days)

Hopefully they will be distracted by the two offers and forget that they can reject them both.  Hopefully they'll be so busy figuring out which offer is better for them that they will indeed accept one of the offers.