We targeted the western belt of Melbourne also as our investment spot from Newport –> Sunshine. That was approx 16 months ago, and back then you could still get decent property for $350-$600K. Today the prices have shot up somewhat. I think Sunshine might be your best bet.

For 340K you will find 1 bed apartments, real small 2 bed apartments, and you will be competing with a lot of folks looking in the same area.
If you go further out to Werribee, Hoppers Crossing & Tarneit. You can get 3 bedroom houses, although if your planning on renting this out, these areas have a lot of rental competition so do think hard.

We got 2 IPs in Newport, 1 in West Footscray and 1 in Yarraville.

All have been performing nicely. Still think these area’s are undervalued compared to the same radius to the city in sister suburbs, so we will keep investing in these areas ourselves.

We can tell you what we would do or specifically what we did in the same situation with roughly the same money.

– Buy a 1 Bedroom Unit, that is approx 10-15KM from a major city that is at least 50squares. = Buy this outright or as close to it as possible for $185K. The Unit you purchase should return a rental income of at least $180-220 per week.
– Once Settled, and you have a 1 bedroom unencombered unit. Use the unit as security to purchase new townhouses. Approx $550K. You should be able to squeeze 2 of these secured against an unecumbered property of that profile.

Reasons for this structure.
– The unit is small enough and cheap enough to always be rentable.
– The value of the unit is the security for new properties. If we work on 20% LVR. You could squeeze 2 Townhouses or several smaller units in there.
– The Rent from the unit should cover most of the shortfall of renting out new properties

This strategy is obviously not without risks, however we did this a year ago and it has worked out very well.
– Purchase 1 Bedroom Unit in West Footscray outright for $150K
– Used it to purchase 2 off the plan townhouses @ $500K ish each.

End result –
– Spend of approx $150K spawned a portfolio of 1.2 Mill ish. In the space of about 3-4 months (to find property, 9+ months to fully settle)
– Minimal capital outlay beyond initial $150K (Approx 20-30K altogether for new contract deposits and processing costs)
– Minimal Stamp Duty Costs because we went for off the plan purchases.
– Maximum tax deductibility across all 3 properties.
– Consequently all 3 properties have gone up in value. 1 Year later, we are almost at the stage where we can get the townhouses re-valued, discharge the 1 bed unit as security, and start the cycle all over again.

Anyways if he question is what would we do, then this answer is what we did and why we did it.

Hope it helps.

Your math is too simplistic to make the judgement right now.

Things that I would do if I were you.
Check with a few agents in the area, and get feedback as to what your place will sell for.
Specifically nominate in your mind what you want for it if sold now and check if it is viable with the agents in your area based on todays market.

Get an estimated sale value of X to work your numbers off.
– Deduct Agent Sell Fee
– Work out Capital Gains Tax Deduct that
– Work out what you want to buy as max spend
– Work out the upfront costs of the new buy with deposits and stamp duties
– Work out how much it costs you to move house between homes.

I would love it if it was as simple as Value X if Sold = Cash Y, but it rarely works that way.
I think if you calculated this scenario based on what you want to sell it at, and what you want to buy, and fill the in-betweens
The outcome of this calculation will make it an easy decision for your original question.

If your objective is tax savings, then buy it in your name, as your name is where the salary lands and where the income tax occurs.
If your objective is to minimize your tax, then focusing on expenses will do little to dent the tax you pay.

From what I understand, as long as the property is earning an income, the expenses are deductible on that property against the entity that owns it. The differentiator is just how troublesome those expenses are to claim.

For Tax Savings, I would recommend the following structure:
1) Setup a Family Trust – For this to be useful, your employer would need to agree to pay this entity your salary.
> This Entity’s sole purpose is to take in your income, and distribute to family members.
> Your wife and child can be recpients of income distribution and pay the tax on the tax bracket of what is distributed
> Even before property, this is helping with tax minimization

2) Get the IP in your name, knowing you will distribute most of the income to your name.
> Strategize for purchasing not 1, but perhaps 3 Investment Properties.
> The Expenses again are relatively low, and barely worth the hassle if thats what you want to recover
> But the Depreciation claims on new IP will have a significant impact on your income tax
> Depreciation claims are the only portion of money in IP that you didn’t physically have to pay for to get back so it works well.

We just did this recently and are paying next to nicks in income tax.

We just crossed the same bridge for our property in Melbourne.
We were originally looking a simple water feature, but then we figured why not make the water feature functional too.
We battled with Pool vs Spa, but pools just wound up too expensive. The cheapest we could find after some serious bargain hunting was approx 20-25K for a small plunge pool (which is what I wanted)
In the end we settled for a spa – Big enough for 4-6 people, small enough to be maintainable without killing finances.

I also rang the agents (3 of them) and they all advised against it. In the end Agents are averse to anything that might make their jobs mildly harder.

Yes there are plenty of people that will be put off, but there are also a lot of people that would enjoy that, as we did.

Melbourne can have relatively extreme summers and winters. A spa fit that for entertainment.

Our house will be up for rental shortly, whereby I am at peace with the fact that only tenants that appreciate a body of water will rent it.
(Worst case scenario, we put a cover over it and don’t use, no big deal)

As an investor, it is counter productive from a money aspect, as it is an unnecessary spend. But then most of the stuff we buy is not really necessary.

I have found it is about personal standards, and what you would want as a family in that house. If you want a pool for your family, chances are that other renters will too.

Technically if you moved out, and it has not earned a dollar since you moved out.
It has never been rented, and therefore never been an Investment Property.
As long as you have not purchased another PPOR then this one is still your PPOR? and therefore CGT exempt anyway.

If you don’t mind me asking. What is the suburb? I find it incredible that 2 agents cannot rent it out after a drop in rent, and your skeptical about the sale.

Pre Preparations
– Have Conveyancer
– Know that you can get finance.

When you make the offer, and assuming vendor accepts.
You sign a contract of sale – On the contract of sale you need to nominate your conveyancer.

Would be wise if you had pre-approval sorted in writing from the lender.

If you sign the contract on an established house, the settlement terms will be there.
You will then need to formalize the loan, get the info to the conveyancer and off you go.

Circumstantial stuff that can impact this:
– Pest Reports
– Building Inspection Reports.
– Valuations

All are optional and dependant on what you buy and what you want. These would occur before you sign the contract, and you would be wise to have the contract conditional to these items.

There is a wealth of to do’s once settled, but thats a different question.

There really isn’t enough info here, but starting numbers on a $250K property would be approx:

– Deposit – 20% = $50,000
– Stamp Duty – Varies by State – I’ll use Vics just for Jollies = $10,070.00 (Will also vary depending on whether you buy off plan or establshed)
– Conveyancing Fees – $400 – $600

Starting numbers to aim for is probably $62K for a $250K IP.

Other Variables you should consider Post Settlement::
– Whether the place you buy needs fixup before renting $Variable
– Depreciation Reports = $400
– Agent Listing Fees = $Variable to the agent. Perhaps $100-200