I imagine that during the time it’s being rented, if you’re still making mortgage payments, the interest is tax deductible, as are all other associated costs. It is after all, while rented, generating income. Of course, you may be liable for CGT the proportion of capital growth during the time it was rented….. ?

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I don’t think it’s only a killing when you sell. I refinance to grab that equity for other investments, and can ‘effectively’ have just got a property for ‘free'[]

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In theory, yes. However, whether that investment makes you any money or not is a different story. Certainly, many investors (and I use the term loosely) recently have misused their equity to negative gear just before the market is set for a correction, and when vacancy rates and rental returns are unfavourable. Look at auction clearance rates and price growth since the reality of increasing interest rates has hit?

One of these days, the banks will re-write the rules and start making margin calls on property investments….

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Well done on a great buy, $47,000 equity straight away fantastic[], and some negative people are talking doom and gloom and other are out there making a killing well done.

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It’s only a killing *when* you sell

I definitely agree, HousesOnly.

Whether you buy a house as your investment vehicle, or shares, the price is governed by what people are willing to pay.

If you make the mistake of hanging onto shares too long and they dip, you either wait it out (if they dip so low there’s no point selling or theres reason to think they’ll recover), or cut your losses. Why should RE be any different???

All investments carry risk, that is why there is potential reward. If a buyer was silly enough to buy without weighing up the risks, and locked themsekves into a loan they couldnt deal with when rates went up, and they had to sell, that’s THEIR problem. They should have done their homework – just like all *serious* investors already do.

As a result of all the investors piling into the market, seeing so-called easy money, we’ve seen supply dwindle, prices sky-rocket, and sadly first-home buyers are the ones that really suffer.

No offence to anyone, but I hope a lot of such investors get burned, because they jacked up the prices when they had no business getting into the market in the first place.

Like Terryw said, check with the council. But even then, be wary, councils can can change the rules at any time and have been known to do so.

Given that almost every man and his dog with a large block is trying to subdivide and build townhouses etc nowadays, councils are not always keen to accept such proposals, or place major encumberances on what you can build.

Get it in writing, and if possible, an assurance that things won’t change in the short-term while you’re getting everything underway… a friend of mine has had such problems building just a duplex in his area.

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“I worked hard at school, so I deserve to earn more money than some one who didn’t”

What a load of crap!

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How so? The whole point of doing well in school is to give yourself options. One of those options is to be able to do a course that will lead to higher pay. The other option of course is not to go to uni, to get into a trade for example and hopefully eventually start their own business in that trade.

If OTOH, someone slacks off in school, the uni door is shut, AND they simply end up doing the 9-5 job with little responsibility and little technical skill, why should they expect to be able to earn anywhere near as much? Why should someone who took the time/effort to get a qualification that leads to better pay, be then asked to subsidise those that didnt put in an effort and who therefore couldn’t go after a well-paying job? You can’t have your cake and eat it too.

As far as uni workloads, they vary from course to course. But I can tell you, I may have had 30hrs/wk of lectures/prac, but I had almost that again in assignments/etc. And that was just as an undergrad. As a postgrad (which is a pre-requisite to work in research), I worked 10-12hrs/day, 6-7 days/wk. And that wasn’t lectures/assignments, that was *work*, the same as any other professional researcher would be doing.

So when someone tells me I don’t deserve better pay than someone that hasn’t put in anywhere near the effort to get where they are that I have to get where I am, they can quite frankly, get stuffed

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The point I’m trying to make is that stereotypes of whatever section of society do not work. I don’t like lines being drawn in the sand that pretty much set an “us” and “them” theme to a debate (ie rich and poor)… The gap in the divide between rich and poor is getting bigger all the time in this country, but I’d like to think people still give a damn about each other, however it definitely seems we’re less tolerant than we used to be.

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I’d have to agree. But, I think one of the things that causes that intolerance is that there are far more people than ever in that grey area between poor and rich, earn enough to no longer qualify for substantial assistance, but certainly not enough to be care-free financially. Unfortunately, the govt class this group as ‘well off/rich’ even though they aren’t. As a result, people are far more likely to want to look out for their own interests and not care too mcuh about those with less.

Let’s face it – the govt have done a good job of making it a user-pays system for all the major things like healthcare/education/retirement. Naturally, people want more accountability as to how their tax dollar is spent when they are no longer receiving much benefit from it.

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The topic of this thread started out as tax, and I don’t think anyone here would mind paying taxes if they were better used. I’m sure people don’t mind paying for health, schools, roads, public transport etc. We all benefit from that. I, like everyone else, hate seeing public funds being misspent.

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I totally agree. I’m disgusted by the govt’s terrorist/defence smokescreen, trying to take our minds off the fact that they collect more from us than, while cutting back on spending on us.

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I’m not sure if this example will show what I mean about stereotypes, but I’ll give it a go.

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It just so happens, my dad is a qualified vet, whose qualifications were not recognised in Australia. He gave up a good job as a government vet. Being from a communist country, although things like pay were irrelevent, if you worked for the government there were good perks/advantages. He chose to give them up and try his luck in another country. I’m just using him as an example…. if the will is there, it is entirely possible. It’s a question of whether you want to take the risk. We’ll have to agree to disagree on this one, I don’t believe it’s impossible to make something more of your life if you don’t have much. It’s more a question of what you’re prepared to do to improve your situation.

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By the way, the traditional 40 hour week went out the door long ago. There’s a lot of people who do unpaid overtime. More than ever, in fact.

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If you’re on salary, yes. You try getting a wage-earner to put in extra hours without offering overtime…

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To me, labelling all, or even most, “poor” people as this or that is just as bad as being a racist, and just as narrow minded.

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And IMO, political correctness is a sure-fire way of stifling healthy debate…. and it’s funny how many PC people play the ‘racism’ card nowadays… if you genuinely took offence, I apologize.

I would argue that for many at the really low end of the wage spectrum, any little extra goes into cigarettes/alcohol/gambling. Certainly, it’s a very generalistic statement, but probably not far off the mark for a broad cross-section of people of that socio-economic background.

Those goods contribute little to the economy, but are nice little revenue earners for the government. OTOH, higher income earners spend more on ‘toys’. These products do generate economic growth, as is clearly demonstrated by our economy/credit levels.

My partner and I recently purchased… of course it doesnt count as its our first home, not IP. It will howveer become an IP in 3-4 years when we move into a bigger place when we have kids, and rent this one out.

IMO, if you’re not going after capital growth, but want the rental income, who cares what the market is doing? Shrewd property investors will be in a very good position in the next few years as the exodus to the share market gains momentum.

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I think the rich should just be happy they are well off and not be greedy

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People in the top bracket aren’t rich!!!! $62k, if your wife is at home taking care of kids, and you’re paying a mortgage, is not much money at all.

The other thing you’ve neglected to consider is the very reason why you’re here (in this forum)… to find a means of retiring comfortably. The govt has made it very clear it wants us to fund our own retirements. How do you propose we do that if it’s all going in tax???

Our tax dollar these days gets us very little…. we’re discouraged from using medicare, whilst still being required to fund it thru the levy, tertiary education costs are climbing, we’re forced to fund our own retirement rather than look forward to a pension. It stands to reason that we should want to hang onto our money because the reasons for doing so are nothing to do with greed, and all about necessity!