Hi Abhi

The remaining $215k will become tax deductible (option 4)

How much are you looking to spend on your next purchase?

It's important that you set this all up correct from the start so as to maximise tax advantages and avoid cross collaterising your current property with your next one.

Any of the decent brokers on this forum will be able to assist.

Cheers

Jamie

Hi Derek

You're doing great – well done on devising such a specific strategy.

A couple of comments that might help.

It doesn't look like you've incorporated the purchasing costs into your calculations (stamp duty, conveyancing, building/pest inspections, etc).

With flipping – unless you sell it yourself, there's going to be REA fees to consider. That coupled with CGT can erode profits quite quickly. Not saying it can't be done – but it's certainly not easy to make a buck from, particularly in the current flat/declining market.

With starting a new job. It might be difficult to get 90% loans if you haven't been in the same industry on an ongoing basis for at least two years.

Hope that helps.

Jamie

It is quite a broad question but if it's high yielding type stock you're after – I'm thinking you'll have to start your search way out west.

Pick up a copy of API or YIP mag and scan the back pages that contain suburb specific data such as growth rates, rental yields, vacancy rates, etc. This should help you narrow down your search.

Cheers

Jamie

Some brokers are switching to a fee for service model. There are number of reasons behind it – particularly the reduction in commission from lenders coupled with the removal of DEF.

Cheers

Jamie

Usually you can get away with a simple IO loan split as opposed to a LOC. Perhaps explore that option with your lender/broker as well. It should be a little bit cheaper.

Cheers

Jamie

Haha – they actually exist! http://www.knittingforums.com/

Cheers

Jamie

That's a first for me – I've never heard of such a fee before. The sundry/postage line item is standard stuff but it really should be part of their "management" fee.

Cheers

Jamie

Yep, you essentially have three facilities set up.

PPOR
Loan 1 – Existing loan
Loan 2 – Equity you've accessed

IP
Loan 3 – IP loan

Cheers

Jamie

Hi Beefz

Welcome to the forum.

It sounds like you're in a decent position and I personally like the idea of purchasing an owner occupied property first.

As you alluded to – you can take advantage of the Govt. concessions which will save you some money. You can also spend some time renovating the property whilst you live in it which effectively adds value immediately as opposed to waiting for the growth to kick in.

If you went down this path, I'd strongly recommend that you set-up the loan as IO with offset. Any spare savings you have, you place in the offset. When it turns into an IP, you remove these funds from the offset which increases the loan back to it's original level. I say this because that loan (which will then be securing an investment property) is tax deductible – for that reason, you want to jack it up back to it's original level (which enables you to claim the most amount of tax possible).

Hope that helps.

Jamie

Hi Adam

Do you plan on holding onto this IP for the long-term? Property will have its ups and downs – personally, I know I'd rather be buying while the market is on the decline rather than an upswing.

Ultimately the decision to purchase or not is yours – however, the doom and gloom of the property bubble bursting has been around for as long as I can remember.

Cheers

Jamie