Hi Mark 

Welcome aboard.

Have you considered using the equity in your PPOR rather than your own savings to purchase your investement property?

Accessing equity in a PPOR to kick start an IP portfolio is one of the most common scenarios we come across.

There's two good reasons why this would benefit you.

Firstly, the equity that you access will be tax deductible (whereas the cash that you use won't be). In fact, using cash from your offset will only bolster your non-deductible PPOR debt.

Secondly, you'd be able to extract enough equity to cover a 20% deposit and costs so you won't need to pay mortgage insurance on the investment property purchase. If you were to use a small cash deposit – you'd be up for mortgage insurance.

With accessing equity, it's important that it's structured correctly so that you don't cross collaterise your PPOR with your investment property. It's also important to structure it in a manner that enables you to identify your tax deductible debt (the equity release) from your non tax deductible debt (your current home loan).

Hope that helps.

Jamie

Hi Tiggar

I've read it the same as Jac M – you've been renovating for three years????

If so, it's time to forget what your standards are and get the place into a rentable condition and onto the market. 

If you've got an owner occupied loan – focus on getting rid of that debt before you pay off your investment property debt.

To do that, you need to have the investment loan set up as interest only.

Cheers

Jamie 

Hi Goatus

I'm not sure how much they charge in Perth but I'm sure you'll be able to negotiate a decent discount if offering up two listings.

Just make sure that you choose a good agent. Depending on the market, I'd have no issues with coughing up a little more to pay for a high performing agent rather than getting a decent discount off one that hasn't't sold many over the last few months.

Cheers

Jamie

No worries – best of luck with passing go….sorry, had to be said.

Cheers

Jamie

Hi there

Deposit power offer deposit bonds. You use these in replace of a cash deposit when exchanging contracts.

The loan needs to be set up as a second split (which can be a LOC or an interest only loan). It's important that it's set-up as a separate split so you can identify the deductible and non-deductible portions.

What sort of trust? 

Cheers

Jamie

Try to find a tenant handbook that outlines the processes in your state.

A quick google search should come up with something.

We have one in the ACT that we used a couple of years back for a trouble tenant. It was a fantastic guide that clearly spelt out the rights/obligations of each party.

We followed every process exactly as it was outlined and managed to get a good result.

Don't forget to document/record everything.

Cheers

Jamie

Yep it happens.

The size of the market that you're looking to purchase in can come into play here as well.

If you're looking to purchase in a smallish town with only a handful of agents then you wouldn't want to burn your bridges by coming across as tyre kicker.

Cheers

Jamie

Hi Matty

Sounds like some legal advice is in order. Where are you located? If Sydney, I'd be contacting Terry W on this forum for some advice.

Cheers

Jamie

Hi Stormy

Our last reno project was a three bedroom house in Canberra on a 900m2 block.

We spent about $15k that included new flooring, paint, kitchen reface, external render, landscaping, new window and light fittings and some other bits and pieces.

All of the work was mainly cosmetic – and most of it can be done via a handy man or yourself if you can find the time/energy.

We were able to up the rent by quite a bit and I'm sure the value's gone up quite a bit too.

Before starting the renos – set up a spreadsheet and allocate an estimate cost to every job and try to stick to the budget. 

Cheers

Jamie

Wow that's tiny.

When I lived in London many years back, the landlord maxed out the living space by knocking out the toilet upstairs and converting it into a bedroom that would make most prison cells looks like luxury. All for an extra 40 quid a week.

Cheers

Jamie