Any news on what our 4 best friends (the banks) are doing as yet?

If they paid for it, why would you not let them take it??  I makes sense to me that if they paid for it, it's theirs…

Sorry Wobbles,

We just couldn't find a reason for you that it would be a bad investement

good luck in your future ventures though!

Hi Wobbles,

On the surface, this looks like a property I would buy if I didn't live so far away (I'm in QLD).  Of course more due diligence than just looking at photos would be required, but if it were to pass a building and pest inspection, it seems like a sound investment.  Strictly from looking at the photos you might spend $10k to tidy it up (paint outside and roof – small tidy up on the inside, new curtains etc), but after that you should have a sound rental property.  Just because someone else hasn't bought it doesn't necessarily mean that it's not a good property!  Sounds like you are trying to talk yourself out of it.  The fact that no-one else has bought it is actually a good opportunity to go in and snap it up at a good price.  You also mention that rental properties are in demand in that area and that demand will increase due to the new industries that are opening up, which will only increase your rental yield and the value of the property!

Don't use the excuse of "it's been on the market for a long time so there must be something wrong with it", or "they must be someting wrong with it if they're selling it".  Those are dumb excuses.  You list many good reasons to invest in this property, but still you hesitate.  Why?  Do you think that old cheap housing is not a good investment?  I have four 40-year old houses in country QLD that I purchased for just over $100k each.  After a little renovation here and there they now earn me a total of over $300 per week in positive cashflow!  (And for all those who say that the days of positive cashflow properties are over, I bought them all in the last 12 months).  2 of them are rented and 2 of them are on lease-option/wrap arrangements.

Of course I am not telling you to go out and buy the house tomorrow, but if you are not going to buy it, find yourself a sound reason not to, rather than speculating.  Check it out, do some building and pest inspections, find out how much it will cost to fix up (I don't know where the $30k figurecame from that's been splashed across this thread – I think $10k is more realistic) and then get a proper rental appraisal from a different agent to the selling agent as to what it would rent for after it's been fixed up.  After doing all these investigations, if you still do not have a sound reason not to buy the property – BUY IT! 

I'd take positive gear over negative gear any day!

nab announced 0.62% decrease

I say "here here" to your comments bardon.  All this fear and hype is unneccessary.  The whole financial "crisis"  is due to fear – so rather than being responsible and easing the fear, and in turn easing the "crisis", the media is feeding it.  Shares are down because people are selling.  People are selling because they are scared of losing money.  If the collective would stop and take a deep breath and stop panicking, and in turn stop selling, which in turn would halt the slide in the value of shares, things will settle down and "crisis" will be averted.

But maybe my thoughts on the matter are too simple…

It basically means that they want 14 days to check things out (check something with the council, do some numbers etc) and if as a result of their investigations the property doesn't stack up, then yes, it's a get out of contract free clause.  Usually the clause is placed there with the best intentions (I have used one in the past when buying), usually because they have not had the time to do these enquiies and they don't want to miss out on the deal.  I wouldn't be too worried about it, unless you have another buyer that wants your property and is willing to put down a contract without a due diligence clause, when you would obviously go with the contract with the least conditions.  If you don't have any other buyers, it's better to have a "maybe" contract rather than none at all!

I am not an accountant, but if you are borrowing against your investment property and using the money to inrpove the investment property, then yes the interest is tax deductible.