Hi Henry

To avoid crossing you take out a second loan against your current property. This loan will be used as the deposit and purchasing costs (stamp duty, etc) towards the next. You can then approach the same (or another) bank for the remaining loan amount.

In general, if equity permits, you would take out the 20% plus purchasing costs out of one property and then source the remaining 80% for the other.

If dealing direct with the bank, they'll no doubt try to cross your loans (it's better for them – not so good for you). If you're worried about structure, it's prob best to have a chat with a decent broker who will set it up properly for you and work in your best interest (not the banks).

Cheers

Jamie

Excellent point. I'd be seeking approval from these guys before considering any work. In regards to the guarantors being released – you'll have to give your lender a buzz to find out. At face value, the LVR looks good but that living area is still on the smallish side of things (so will be dependent on the banks policy).

Cheers

Jamie

Hi Ben

Welcome to the forum and congrats on your first post

There's not a whole lot you can do except for educate yourself and save like crazy. The first property is always the hardest – it generally gets easier after that.

I don't personally know of any accountants in Melb but I'm sure some others on the forum will be able to help you out.

Hang around, keep asking questions and continue to expand your knowledge. That way, when you're ready to buy your first property you'll be confident in the decisions you make.

All the best

Jamie

I watched this episode a few months ago. It was very interesting – basically a report on how China has stimulated the building industry to such an extent that there's no demand for the properties being built.

Cheers

Jamie

Hi SJ

Your best bet it to speak with an accountant.

I think some costs (such as conveyancing fees) will be taken off the cost base when calculating CGT when you sell whilst others such as LMI are claimable over a 5 year period (or if the loan term is less than 5 years – it will be claimable over that period).

Cheers

Jamie

Yep, it's the same.

There's no harm in asking though – that's what this forum's for.

Congrats on the first IP

Cheers

Jamie

Hi James

Stamp duty is added to the cost base when calculating CGT. So it's claimed when selling up. The ACT (and possibly NT) are notable exceptions.

LMI is generally claimable over 5 years (or the term of the loan if it is shorter than 5 years).

Cheers

Jamie

Hi Erg01

Welcome to the forum.

Long story short – it's not possible.

Tax deductibility is determined by "purpose" – if the purpose of the loan is to pay down your PPOR then it won't be deductible (as it's not an investment).

For what it's worth, your current structure looks ok. Do you envision ever turning your PPOR into an IP?

Cheers

Jamie

There are other ways to improve the cashflow situation of an IP. Renovations are my favorite – particularly simple, cosmetic renos that don't cost a great deal but add some equity and also attract a higher rent.

Allowing pets is another great way to up the rent.

Allawah – in regards to your post above. Your right – negatively geared properties are absolutely fine providing they are achieving capital growth that more than compensates for the costs of holding the property.

In terms of paying extra money into the loan. This is only advisable if you don't have other non-deductible debt (such as a PPOR loan, car loan, personal loan, ect). It makes little sense to pay down a  tax deductible investment loan when you have other debts that aren't tax deductible. I could go on for ages…..

Hope that makes sense.

Cheers

Jamie

Negative gearing is fine providing the property grows in value at a rate that's higher than the costs of negative gearing.

It's not an ideal strategy for someone on a low income as it causes them to hit  a serviceability wall with the banks a lot quicker – which means lost opportunities elsewhere.

Cheers

Jamie