no worries, ps change the title of your thread – using all capitals is the internet equivalent of yelling and is considered rude

yes.

note that if you have owned the property for more than 12mths, then only half of the profits will be subject to cgt

Do you need to bulldoze the house?  Could you keep it, renovate it, and build an extra dwelling or two in the backyard?

Also, why sell?  Keep both!

Hi!

A couple of things to ponder:

1. Your house is not bad debt as such, but is certainly non-deductible.  So you want to get that under control.

2. Your house is worth $400k and you owe $290k.  Doesn't mean you can "use" the difference of $110k as a deposit for another property.  A lender expecting an 80% LVR (loan to value ratio) of you will require that you leave 20% in the deal.  So this means you have to leave 20% of $400k in it (which is $80k).  That leaves $320k. But you owe $290k.  So there is really only $30k to play with there.

If I were you I would :

1. ensure my home was on an interest only loan with offset account
2. only ever pay just the interest – with all spare monies going into the offset
3. get my head around the fact i'll be real glad i did steps 1 and 2 if i ever want to convert the PPOR home to an IP
4. save my butt off for a year, funnelling all spare cash into the offset account
5. meanwhile, read read read, choose a suburb for the IP and visit plenty of open for inspections, and find out what type of properties are in rental demand in that area
6. you would be surprised how long it takes you to be rock solid with knowledge in your target suburb.  a year will elapse before you even notice.
7. apply for finance.  DO NOT offer your home as security for the IP loan.  go to a separate lender if need be.  they can take one mortage for 80% of it, and a "second mortgage" against your home for the remaining 20%
8. buy!

Others might respond differently.

Hahahahaha!!!!!!!!!!  Pure gold! 

Hi desilucky,

I've noticed a couple of urgent questions from you lately – I'm worried that you are perhaps rushing into buying properties.  Best to do your homework first and define your strategy.  For example your strategy might be:

– Property built after 1985 only (for depreciation purposes)
– Within 30km of a capital city
– Within 1km of a train station
– Near schools
– Requiring very little renovation due to limited skill or budget to cope with it at this stage
– Not near electric transformers, refuse sites or other undesirable zones

Wrong.  If the tenant has whinged about something they could slip on, and you as the owner is made aware, and then the tenant does slip and hurt themselves and takes you to court over it, you can absolutely lose.  I've definitely read precendent cases on very similar matters.  One that springs to mind was outdoor tiles that were quite slippery.

Personally, I would not want my concrete slab to be kept damp due to a dodgy pipe.  I'd be fixing that… unless you are planning to bulldoze the house soon anyway?

Hi there

Does it actually have a kitchen and bathroom?  If not, you have to add these things, which comes at a cost.  Also it will take space away from the existing rooms.

Unfortunately, if most of the building is student accommodation, this apartment will be tarred with the same brush.  In other words, it will suffer poor capital growth just the same.

I am extremely confused.

Yes, it is possible to get a loan with less than 10%.  However.

Why on earth are you skeptical of the first home owner grant?  Do you seriously have a problem with free money?

Why are you talking about not wanting to wait 10 years to invest?  You are in your final year of school, and then you'll be in a full time job.  So next year you will be able ot invest.  In the meantime you could research a suburb or two, go to loads of open for inspections to understand what properties in that area cost – and how much more something is worth if the kitchen is recently renovated versus original etc, do laps up and down the aisles of Bunnings to understand what things cost if you need to do minor renovations….

Am I missing something?