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  • Profile photo of kootzykootzy
    Member
    @kootzy
    Join Date: 2007
    Post Count: 4

    Sorry Snow,

    But yeah what Richard Said

    Profile photo of kootzykootzy
    Member
    @kootzy
    Join Date: 2007
    Post Count: 4

    The benefit of the interest only loan on investment properties is the tax deduction.  As only interest is tax deductable, and not any money paid off the principle, you rely on your properties capital growth to build equity to borrow against or to make money at the sale. 

    Profile photo of kootzykootzy
    Member
    @kootzy
    Join Date: 2007
    Post Count: 4

    I live in Melbourne and want to buy a IP in or around my home (Ringwood) or within the eastern suburbs closer to the city. I know there is no crystal ball but I can't decide if I should buy a 1 bedroom apartment very close to the CBD (eg Richmond) or buy a 2 bed unit in my home area. Both of these types of properties I have looked at are quite old and built at least 30 years ago. (little bit worried about future levies from the BC). Doing some rough sums either one will cost me aboout 150-250p/w to hold (neg gear).

    It really depends on what reasons you are investing. 
    If you need the cash flow then these properties aren't going to be for you as you will be paying out of your pocket.
     If you are investing to reduce your taxable income then they aren't really going to be of much benefit as the build cost of 30years ago were far cheaper then today and your depreciation will be minimal. Also the building can only be depricated for another 10 years so if you intend on keeping it for up to 15 years you aren't going to have any building deprection after that time.  You are also going to limit your resale market to mainy home occupiers as most investors aren't going to invest in a property with no building depreciation value.
    The only real reason to invest in these properties would be if this is the entry point of the property market in Melbourne is at this price and you forecast future capital growth on these properties.  Inwhich you should study the growth rates in both these areas and make your decision based on which property will be of more value in the future.

      
    But as mentioned by earlier posters read all the books you can and attend as many seminars as you can. There are numerous different investment strategies based on your needs.

    Profile photo of kootzykootzy
    Member
    @kootzy
    Join Date: 2007
    Post Count: 4

    Rob

    Not a good situation if the number of property agents in the area are limited.

    If you can get a friend to ring up,  tell them to let the agent know they are transferring to the area in the next few weeks (that way they can't just suggest you walk through the property) and a friend, whom is a local told them the property was available for rent. 

    Tell them to ask the agent if there are any details and photos of the property they can view on the internet.

    Nathan

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