Great stuff as always – keep it up.

Cheers

Jamie

I think he/she is in the process of getting one but it hasn't settled yet.

Cheers

Jamie

Here's a recent article about the topic in the Age – http://theage.domain.com.au/home-investor-centre/beware-of-the-false-profit-trap-20110909-1k0ek.html

Cheers

Jamie

Hi again

Yep, I'm based in Canberra.

Feel free to give me a buzz during the week and I'll help you work through your questions.

Do I think a trust is beneficial? I don't know enough about your situation to advise – but in general, I think that too many people get caught up in the idea of purchasing in a trust structure when it may not be that necessary.

The debate about cashflow or capital growth has been going on for years. Personally, I don't get too caught up in either – I just look for an investment that suits my strategy. I have both positive and negatively geared properties – townhouses, units and houses.

Cheers

Jamie

Hi again

If you decide to buy it as an IP – I'd consider using less of your own cash and more of the banks. If you took out a 90% loan (and paid some LMI) you'd be able to leverage more of the banks money and also be able to claim more on the interest repayments. The remaining cash could then be parked in an offset account.

Personally, I wouldn't opt for STG for an interest only loan with offset – there offset doesn't work in the true sense of an offset account. If you're looking for a 3 year fixed rate – they're not the most competitive either.

Where are you looking to purchase? $325k for a townhouse in Canberra sounds good (that's assuming it's in Canberra).

Cheers

Jamie

Hi investingcouple

Welcome to the forum.

If it were me (and this is only my opinion – it wouldn't suit everyone) I'd look at purchasing your first home as an owner occupied property. That way, you can take advantage of the FHOG and possibly concessional stamp duty (who knows how long this will continue – NSW is scrapping it from 1 January 2012).

For the finance, I would look to take out an interest only loan with an offset attached. Instead of paying down the principle, simply place any savings into the offset account (which will have the same effect) and then you can withdraw these funds down the track if you ever decide to turn this property into an IP.

In Canberra, I have a preference towards 3 or 4 bedroom houses in the outer burbs (Tuggeranong or Belconnen) on decent size blocks. Something that can be cosmetically renovated cheaply – that way, you're creating the equity instead of waiting for time to do its thing. Here's an example of a property my wife and I recently renovated (in our spare time) – http://www.facebook.com/media/set/?set=a.205513116151125.43824.127826280586476&type=1

Again, these are only my opinions – others will have different thoughts on what the best approach may be.

Best of luck with whichever path you go down.

Cheers

Jamie

beau wrote:

  Is it disadvantageous tax wise? And are there many other hurdles I don't know about? I was hoping to hear from someone who may have done it.
Cheers

It's a good question. If it were a single dwelling that was your PPOR and you rented out a room or two, I'd assume it would be considered a private arrangement – therefore you probably wouldn't declare rent but you wouldn't be able to declare expenses either.

If you were to treat a portion of the property as an IP – there is likely to be CGT issues to consider.

As always, a qualified accountant should be able to advise.

Cheers

Jamie

Good point – I agree.

Cheers

Jamie

Hi Beau

Here's a spreadsheet that will help you assess the numbers on a potential deal. I'm sure it's not as flash as some of the expensive programs but at least it's free – http://www.passgo.com.au/pass-go-investment-property-analysis-tool

Cheers

Jamie

Haha – I like how we both opened with the "I'm not an accountant but……"

Cheers

Jamie