I think he was talking about the $380 p.w rent.

Hi again Nurse1

Easy peasy. No need for a new application. You will be able to claim the interest repayments from the day it converts into an IP.
If it's currently a principle and interest loan, I'd recommend converting it to interest only. This is generally a simple loan variation which might incur a charge ($200 – $300). In fact, you should probably get onto this sooner rather than later – it's not very effective(from a tax perspective) to pay down the principle on a loan that is going to convert into a deductible debt in the future. If you would like to make repayments beyond the interest only portion, you could (depending on your current lender) set up an offset account against this loan.

When converting your PPOR into an IP, make sure that you obtain a written valuation for the property (a real estate agent appraisal should suffice). This way, when you sell the property in 10 years time, you'll only be paying CGT for the period that it was an investment property (and you'll have proof to back up your claim).

Cheers

Jamie

Wow, $380 p.w is quite impressive. Might have to make a trip up to west Sydney in the new year.

Hi Trippsy

Welcome to the forum. I wouldn't say it was a dumb idea – nothing wrong with thinking outside the square a little.

However, one of of the most attractive things about property investing is being able to leverage – ie. using a small amount of money to purchase something of much greater value that hopefully appreciates over time.

Instead of saving for four years to purchase one property (which will probably have gone up in value over that time) you could use a 10% deposit ($11k) plus completion costs (roughly $5k) – total of $16k to purchase your property. You've then secured the house at todays prices and if the rental yield is high enough, it will be neutral/positively geared so you can almost set and forget about it.

If you're able to save $30k p.a – you could potentially purchase a couple of these bad boys each year (depending on your borrowing capacity, ect). Imagine that, in 4 years you could possibly own 8 properties which are hopefully all appreciating in value – or you could own one outright where all the rental income (because there is no mortgage on the property) gets added onto your taxable income.

I hope it makes sense.

Yep, no probs there. As long as the LOC is being used towards investment purposes (ie. deposits on IPs) then the entire amount will be deductable.

Check out the council website (you'll have to google it). Some of the ABS data is helpful as well.

Allhomes (which is a Canberra based website) recently began listing Tasmanian properties for sale and rent – you might find this helpful http://www.allhomes.com.au/ah/tas/rent-residential

Same, should be a good read.

No dwelling on the land could be the reason? I had a rural/residential deal on a 40 acre block a couple of months back and CBA were keen to ensure a dwelling was on the block.

It's definitely possible but being self employed can be a pain in the bum when it comes to applying for finance. 

In short, it can be harder to get a full-doc loan across the loan for a self-employed customer compared to a PAYG earner. Therefore, unless your financials are in good shape over a couple of years (one year will suffice with some lenders) then you may be restricted to lower LVR loans – meaning you'll need to come up with larger deposits.