Mandurah in WA.  I just read an article on API that said that while the entire country had experienced growth of an average 2.2%, Perth (and so presumably its surrounding areas) saw a drop of 3.8%.  Mandurah is just 70kms south of Perth, situated right on the coast and has a great lifestyle.  They recently invested in a new train line to link it to Perth which was completed about four years ago and upgraded the local freeway too so now we are in easy reach of Perth.  I am reading that they expect the area to grow significantly in the next ten years and I do see that a lot of local work is going on with plans to seriously upgrade the shopping centers and upgrade of the road systems around the foreshore area.  There is a lot of tourism in the area too.

I am new to all of this but these seem like good drivers to me or have I missed the boat since the train line and freeway have been completed for a few years now.  Would that not stimulate further growth as people realize they don't have to live in the city to work in the city.  An area in between Mandurah and Perth is also being heavily developed and they are putting in a new station too with talk of others along the line.  Like I said, I am inexperienced but these things give me the confidence to say that the place is on the up. Oh there was a brand new Marina built not so long ago too and the area is still under development there too.

Thanks to you both.  I am in Mandurah WA.  Do you know how I find out the rates?  I would like to be able to find out the accurate council rates too.  At the moment I am taking my figures from a 3 bed that I have seen advertised and just entered the calculation to accommodate a 4 bed, 5 bed etc and added a cell in my spreadsheet of how many bedrooms. There must be a better way to calculate these figures for my due diligence.

I am new to all of this Terry and to me they seem like the same thing.  Of course there will be differences.  Would we have more protection if we structured it as a trust buying the house?  I know that initially, the entity in which the business is set up under can make differences in protection and liability.  Is this falling under the same thing.

We intend to run a few small business's from our home as we progress. One of which would be a boat charter, or rent the boat from us based at home, ie, people pay us $200 or so a day to take a boat from us for the day on a trailer for example.  I have already mentioned the B and B or maybe renting to FIFO workers too.  Basically I want to generate as much income from the property as we are comfortable with before it starts becoming a pain and giving up too much in the way of privacy.

I have been advised to get in touch with you since this is your field.  We hope to buy in about May.  When would I need to be considering all of this?

Well that's opened my eyes to something I didn't yet know too.  I didn't know that there was such a thing as CGT exemption on your main residence so thanks for that, good news.  Presumably that's as simple as it sounds.  If you make a gain on the property you live in, there is nothing to pay on tax on the gain?

It's not something I have put a lot of though into as yet but I simply thought that since I will be buying a 4 bed house (so that family from the Uk can come and stay with us), why not rent the room out whenever I could.  If it will become a minefield it may not be worth it for the little amount of time that I may do it but if it looks like a consistent market then it may be something I do a lot.  I also have a large market for FIFO workers in my area in WA for Karratha and Port Headland workers, Tom Price etc so that could work too.

"So you are thinking a roomshare or 'air B&B' arrangement"  I have no idea what either of those are.

Benny your answer is very understandable.  I couldn't explain it to anyone else just yet but I get the principle.  Thanks

Catalyst, I like your thoughts, to evaluate from the point of view of including the borrowed sum since you are liable for it.  

So I need to know how to increase the value and the profit of the property just like an investor in companies needs to know how to increase the productivity and profit of the company he has shares in to produce dividends and growth, and that is where market research and market knowledge comes in.  Knowing the area is on the move for the capital growth and knowing the area to know what the rates of rent are and if you can increase them somehow.

Cool, I feel like I can glue that piece of the jigsaw down now.  I'm confident I see where it fits into the big picture. We're getting there.

Thanks all.  That was my query.  So if we look at the figures above as realistic figures, how can people ever achieve the minimum 7% yield that I hear Nathan Birch saying he only invests in?   I was led to believe that your property price roughly is your weekly rent price..  ie $400k purchase will generate $400 per week.

I'm comfortable with investing in domestic property even though I do not know the very best way of structuring it.  I have a good idea on the best way, ie having an offset account so you are ready to take the money back out whenever you like and ensuring that you have at least a cash flow neutral property.  I know I need to buy in an area which will move to give me captial growth, I know I need to try us much as possible to buy under market value to give me a buffer and as much instant equity as possible and I know that doing renovations can increase my cashflow. As yet I don't know the very best way to gain all the benefits of tax laws and what is deductable and as yet I do not have advisors in place apart from you guys and you tube.  I know that buying in the right part of town is wise to give good access to schools and stations etc.

What bothers me the most is that I keep reading, like above, that its good, in fact essential to set things up correctly from the start.  Thing is, how do I know when I have set things up correctly.  My first very simple goal is to get my own house paid off as quickly as possible so I can relax a lot.  I wont have to be afraid of speaking my mind at work and be scared of what is going on at work etc etc.  Living like that and being worried about being out of work is a horrible situation to be in so that is my first goal.  If I only acheive that in ten years I will be happy.  Being filthy rich would be great and I have screen savers whetting my appitite with sunseeker yaughts to keep me going but more important than the money is having free time to spend with my kids hence the menial goal.  I am a FIFO worker so I am earning good money and I want to do smart things with it rather than squander it.  I know that I lack education in finance as highlighted by Rich Dad books and I am happy to learn.  What I could really use is a mentor.  I am going to see a financial advisor with my wife so we are all on the same page and see what they have to say.

Another thing I have going on is a small business with my wife.  She loves dogs so at the moment she has a small business walking dogs and has started pushing into boarding dogs to earn money.  I am also looking into renting out a couple of the spare rooms in my house as I live in Mandurah in WA which is quite a tourist town in the summer. I think we can do quite well from a summer B and B and turn my liability into an asset.