That is a fact Bennido and that is exactly what we did. I did check with my accountant to confirm. If you borrow against your PPOR to build or buy another PPOR and rent the first PPOR, then the interest on the equity used from first PPOR is not tax deductible as it is the purpose of the loan that determines the deductibility.
Hope I am clear in the explanation.

Hi
We have just finished converting 2 of our residences (1 was a PPOR) into student accommodation. I was going to write a detailed post after I caught up with my breathing, but here I am.
The two residences are as follows:
1 was a 3BR, separate L shaped lounge, separate kitchen. We converted the L shape into another bedroom, made lounge and kitchen into open plan, so that is now a 4BR residence.
2 house (our ex PPOR) is a 5BR + study, we made that into 6BR house.
The houses are duplex, 1.5kms to the uni,1km to supermarket,hospital, pub and a service station, halfway between the 2 campuses of CSU Albury.
We now have 10students living in both the houses.
We got them to sign individual room leases for 48weeks rental payment for 52 weeks lease.
Room rent includes gas, electricity and satellite internet connection(we cannot get ADSL there yet)and weekly cleaning of the common areas.(My husband will do that and we can keep an eye on the property as well)
Houses are furnished, they only have to bring their linen and kitchen utensils, crockery etc.,
Rooms average rent is 105 per week.(I was told it was very cheap in comparison to others in town)
Every parent who brought their child was impressed with the houses and the UNI is actually recommending them. I did not spend anything in advertising, made up a flyer and gave it to Uni student accommodation services and they did the rest.
Rooms filled two weeks before uni started.
We have spent $7,000 on furniture(Fantastic did a deal with us)
$1,000 on electrical applianes like fridges, washingmachine, toaster, kettle, mirowave etc.,
$4,000 on data cabling for each room for internet access along with servers, hubs and modems and satellite connection.
the 4BR house needed complete refurbishment as the previous tenant used to smoke in the house – about $5,500
So for about 18 to 19K investment, wehave created a source of passive income that would support our son’s study in Melbourne – both tuition fees(private music academy) and his stay in ML. After 3 years, my husband can possibly retire from his part time job that he hates.
It turned out to be a very successful project worth duplicating. Only downfall would be the returns will not be as high initially, because the two houses that we converted do not carry as much mortgage, but considering the shortage of quality accommodation for students in this area, it is worth the effort and we will be doing it.
What have we learnt out of this?
Nothing is impossible.
Do not succumb for little stresses
No pain No gain
You dont know until you venture out. We are living in a rented house at the moment with views to die for(and i don’t have to pay the mortgage, the owner is negative gearing) and by the way I can claim 20% of my rent for office expenses.
To answer your question, I think if the house is more than 6 rooms, it will be classified as a boarding house and you will be playing with the next level of rules, as in increased insurance, onsite manager required etc., I think it is for more than 6 rooms, but you can find out from tenancy board.
As far as students concerned, you get what you give, and we have to trust them to behave like mature adults and they do. I don’t have any problems dealing with teenagers, I love it and they seem to respond to me.
I don’t know if I have answered your question, and I am sorry if it sounded like I am bragging, but could not help enjoy the success after hard work – gosh it was hard work, putting together 10lots of furniture beds, desks, chairs etc.
I just went with normal landlord insurance and take it from there.
Don’t hesitate to ask more if you need to know anything.
Yes, Simon did help me initially when I had the idea and he is good.
Padma[biggrin]

Hi Collie
What about Real estate agents selling fees? For $240000 selling price you would be looking at around 7 to 8K atleast if I am not mistaken. Unless you want to sell it privately without an agent, then advertising costs needs to be added.
Padma

Hi Agentsmith & Nordicskier
Yes, we had the first meeting at my place and it went very well. There was 5 people plus us that makes 7 – Linden and Lisa, Collie & Nathan, Annette, & David(couldn’t make it), myself(Padma) and my husband Mohun. We sort of introduced ourselves in terms of where we are at the moment and had a general session – so it was more like ice breaker than anything else. then I took everyone else around to our IP’s that we are converting for Uni student accommodation and showed them.
Linden Glen kindly offered to organise the next meeting and let everyone know. It probably would be first week of march and it will be posted here as soon as we decide the date. Next meeting probably will have an agenda although it is upto Linden. overall it was a very friendly meeting and I am looking forward for more people to join.
Please email or PM me for further discussion or details.
Regards
Padma

4pm Collie, see you there?
Padma

Hi Everybody
Congratulations to one and all. I would like to add that last June, we have celebrated 25years of marriage (I am not old, just got married early). We are at a stage now, that we don’t have to open our mouths before we both know exactly what the other is thinking. It is wonderful and life is beautiful. Marriage is give and take, more give than take. If we put the other person’s needs first, then really there are no troubles. Good luck toyou all and I am hoping to celebrate many more anniversaries to come with you all forumites.
Padma

Hi Jaffa
I don’t know about leading a group but certainly would be interested to meet this Property Manager. I also had a message from another couple from Wodonga interested to be part of the group, so looks like 5 to 6 people. But I am not sure what we do in the group? Any guidance there if you have experience or let the group decide once got together. Please let me know the details of this lady and we can take it from there I guess. Thanks for your proactive approach.
Regards
Padma

Hi all
I am from Albury (Albury-Wodonga twin cities),in between Sydney and Melbourne and Canberra. great place. Not many +CF properties currently as the market boomed last two years.I would like to know anybody else from Albury or Wodonga and meet up with them.
Padma