Ok thanks for the advice. Will strike it off the list then. Might just concentrate on regional areas like Mildura, Ballarat and Bendigo.

Yes, agreed. The last time I went there was probably 15 years ago. My partner is from Germany and has never been, so, thought we would take advantage of the cheap jetstar mid week deal

Thanks for your advice, Richard.

What about those suburbs not immediately at Gold Coast, such as Upper Coomera, Coomera, etc., where apparently there's an infrastructure development plan? Read something about it end of last year, but couldn't find the article anymore >.<

Hi Jacqui,

Thanks for your response.

In all honesty, I didn't get into IP until I was smacked with a fat tax bill last financial year due to my IP being fully owned in SA. (I was working in the Middle East for 5.5 yrs prior to that). Then, I started looking at how to offset my tax and it appears that the only way to do this is to use my fully owned IP as an equity for a line of credit. I have since purchased another IP since. I have since used up 15% of the line of credit and therefore, can afford to buy another IP without having to have any cash at all.

Ideally I would like to retire now but it's financially not viable, hence, I think I will work for another 10 yrs. When I retire in 10 years' time, I would probably sell one of my IPs to pay off the mortgage or buy outright a property I would like to live in (PPOR). Hopefully, I can keep one or two positively geared IPs; or if not, sell an IP with good capital growth over the next 10 years.

My first property was a townhouse and it didn't make any CG over the last 5 yrs; hence, I'm not keen on townhouse and units anymore. 

– LC

Another issue (never ending!). So, I took the line of credit (LOC) using my fully paid PPOR as the equity. As I was waiting for the line of credit to settle, I needed to pay the 10% deposit on the IP which I was going to use the LOC for. My broker told me that I can just pay it from my own cash and then reimburse myself once the LOC was settled. So, that's what I did. Unfortunately, after that, I found out from my tax accountant that if I reimburse myself, the interest on the amount would not be tax deductible as I have to pay the third party directly from the LOC in order to get tax deduction on the interest. Is this true? Can't I just provide the details of the transfer I made for the 10% deposit to prove that I used that money for the IP?

Thanks for the response, Terry. That's what I thought. So, really, no way to reverse the non PPOR which is fully owned with my PPOR which has a mortgage! My finance is so screwed up. LOL.

Thanks Dan. I've since done that as I didn't get much response to my post earlier on!

Now, where to invest – regional Victoria with good rental yield and risky in terms of CG or suburbs around Melbourne which is less risky in terms of CG but would have less rental yield? I bought one IP at Hastings, Victoria using my SA property line of credit for the downpayment (unfortunately, made another mistake as my broker told me I could pay the 10% deposit using my own cash and once the line of credit is settled, I can reimburse myself. Found out from my tax accountant that if I reimburse myself, the interest on that amount is not tax deductible. I have to make all my payments directly from the line of credit to the external third party). As the property at Hastings is quite cheap, I can afford to buy another property. I was thinking of Geelong area (Newcomb) but getting conflicting advice from people around me, hence, now, thinking twice if I should focus on western suburbs around Melbourne (15km from CBD or thereabouts), which is still affordable ($450K) instead of Newcomb ($300K).

What do you think?

$1,564.29/month

Thanks all for your comments. 

I have decided to take up an interest only loan which in effect makes my investment property a positively geared property. That doesn't help with my tax situation of course. I was naive thinking that I would pay the same amount monthly but the whole payment goes to the interest instead of partially to the principal but of course it just means I pay less monthly when I opted for interest only loan. Should i change it to principal and interest loan as soon as I can do so without penalty?

I sought further advice from an ANZ financial planner who advised that I should really look at low returns properties which will have better capital gains within 15km from Melbourne CBD. I could do this with the line of credit I had applied secured against the property I own fully in Adelaide. 

Do you think securing my fully paid property in Adelaide for a line of credit to use for payment of 20% of more investment properties is a bad idea and that I should just rather have a fully owned property with rental income and pay 38.5% of it to tax?

No, I don't think my mortgage broker is rich. Never really asked! 

Yes, I did have depreciation schedules etc for the property in Adelaide but still wasn't enough to offset my tax. I think I might need a good tax accountant too.

Should I really be sacking them all and get a new mortgage broker and a new tax accountant? Anyone has any recommendation?