Hi Gametime

I would have though the opposite. This forum definitely has a more pro cash flow positive following than negative gearing.

With your income, you’d be best served purchasing something that doesn’t cost you a lot to hold (because it will quickly reduce your ability to borrow more).

Personally, I wouldn’t use a $100k deposit on a $250k purchase. I’d look to borrow more from the bank (and keep your hard earned stored in offset for contingencies and/or future purchases). Besides, you might want to purchase a PPOR at some point – and you wouldn’t want to have dropped all of your savings into an IP.

Cheers

Jamie

Hi bluehoon

Yep, consumer debt can hurt!

With your current property, can you add value to it through renovations and create some equity (instead of waiting for it).

Have you had a depreciation schedule prepared? This will bolster your tax return and assist with paying down some of that “bad” debt. Also make sure the rent you’re currently receiving is in line with the current market.

Cheers

Jamie

I don’t have a whole lot to add (everything’s been covered) but just wanted to mention that if it’s any consolation – I also bang my head against the wall dealing with the same bank (I have a few loans with them). Just switching an offset from one loan to another became quite a feat the other day.

You’re not doing too bad for yourself – you’ve already got a few properties under your belt and time on your side…that’s a lot more than most.

Hang in there.

Jamie

Ideally you’d setup a second loan against this property. This will be used as the deposit and purchasing costs towards your IP (the remaining portion would be organized through the same or another lender – just depends on where the best deal is for you). So you’d have to components of your current loan 1) your existing loan which should now be converted to interest only and 2) a loan for the deposit and purchasing costs towards your next PPOR. The first loan would be deductible whilst the second wouldn’t be.

You’d only have to pay CGT on the two years it was an IP (with the usual disclaimer that I’m not an accountant). Should you sell it? Do you think it will make a good IP? Have you paid down a significant amount of the loan which means your tax deductible debt will be minimal? If so, Richard’s touched on some options above.

Hope that helps

Jamie

Economics hey….. Gregory Mankiw’s books were always on the agenda during my time at uni. For recommended reading on property investing there’s a sticky thread on the forum somewhere….I had a quick look but couldn’t find it. It’s there somewhere though.

Cheers

Jamie

You shouldn’t need building (but wouldn’t hurt to check). Landlords insurance is always a must. ING and Real are also pretty good and allow for self managing (if you opt for this).

Cheers

Jamie

Totally agree with Jacm and fword, the issues you’re concerned about are mitigated by utilizing a good property manager and taking out landlord insurance. For what it’s worth, the body corporates I deal with for two of my properties are more of an expensive hinderance than anything else – I honestly can’t see what they do in exchange for the quarterly fee I (and every other owner) pays.

Cheers

Jamie

Hi EZ

Yep, it should be. If you’ve never lived in it than I can’t see why not. Great timing as well – end of financial year is just around the corner

Also, look into getting a depreciation schedule prepared. I know you were thinking about knocking the place down (so may think it’s not worth it) but you’d be surprised at how much you can claim (even on older properties).

Cheers

Jamie

Hi Springchicken

Welcome to the forum

Your questions tie in to a similar thread recently – check out the responses to this post (hopefully it will help you with your search) – https://www.propertyinvesting.com/forums/property-investing/creative-investing/4336394

Cheers

Jamie

Hi Bacchu

$345k for a 1 beddie apartment in 2005 (I’m assuming in either Belconnen or Woden) sounds a bit rich. You can pick up comparable off the plan properties for around that price today.

I wouldn’t say it’s a case of no growth in the area (because other Canberra investors have done well over this period) – I think you may have just paid a bit too much at the start.

Cheers

Jamie