Hi Brett,

Have a PLAN, address come of the following in your plan;

1) The strategy of the renovation (hold and rent or sell)

2) Cosmetic or Structural

3) Budget

4) Timeframe

We suggest you look to project manage instead of doing any for the work yourself, as it will enable you have scalability in your projects.

PS have fun!!

Hi Natalie,

We have a lender who specialises with investors which can do split loan in you own name, hence you are only responsible for that debt but it is secured on the same property, but we would need more info to see if you qualify. I would hate to mislead you.

Hi Headspin,

I agree with Jamie;

1) avoid cross collaterisation

2) a good broker considers your future plans 

BTW remember to take tax advice from your tax agent, but there are good point your can discuss with them.

Have fun.

PS when invest think nationally, it helps reduce land tax (a cost) to managing your portfolio.

Hi Matt,

Have a read of this book, The Millionaire Mind by Thomas Stanley

http://www.fishpond.com.au/product_info.php?ref=3660&id=9780553813647&affiliate_banner_id=1

This will provide you with some prospective in terms of managing or selling.

Hi Steve,

Have you had a chance to catch up with Richard yet?

Hi Menia,

Well done!! You're on track by considering to want to have an investment property. What you should consider next is why do you want an investment property? Reading  your post, it sounds like for income. These are some considerations you may want to review;

1) how much of my own money am I willing to spend to generate an income?

2) what types of tenants would I like to have to earn this income?

3) what will I do if there are no tenants in the property?

4) what is my exit strategy? Do I plan to sell in 10/20, do I plan to possibly move in?

5) Am I getting unbiased property information?

Property can be an emotional purchase, so remember you're investing for numbers, or in your case "income". Where are you current getting your property reports and statistical data from? We may be able to provide you with property and suburb information from Australia's leading property information specialists. These reports a national so you can grow your investments nationally and reduce expose to state based taxes like land tax.

Hi Unlimited,

General idea is any costs to investments or business incomes are 100% tax deductible, however, you will need to consult your tax agent. Tax deductibility in PURPOSE not what the security is.

1) if the funds are current for Bank A is used as a redraw then you just need to keep records for your accountant, what was used for investment, eg (A LOC + BANK

a) Note I have seen accountany do % of the A LOC (eg 76% was for investment, etc), but I would recommend for simply sake (split the "credit"). This say split, LOC to 115k and 35k. This now ensure all of the "loan" 115k was used of investment use, and continue with your debt cycling with the remain 35k for your personal "non tax deductible" debt. Some lenders will allow you to adjust the loan facility without a review of credit as you a not increasing their risk, it depends on how your lender views NCCP.

b) your tax deduction is not the RATE (variable or fixed) but it is regarding the costs to hold the investment, eg the interest, depreciation etc. My understanding is the interest paid for the investment property is tax deductible, which is fine if it is variable.

If you don't split the loan then this is there is gets interesting. Say you made a principle reduction of $20,000. Who can argue you didn't reduce the investment component and only reduce the personal component (the remaining 35k, if drawn already for personal use or using debt recycling) hence it is reduced proportionally at 76%. The problem is then the redraw on this facility is useless, unless you redraw again of investment purposes, as you would increase your tax deductions (the loan balance) without the potential of increasing income, if it were done for personal use.

BTW I like your strategy.

1) maximise tax benefits

2) keeps properties separate

3) potential to capitalise with different lender specials

As this is an investment you may want to consider LMI, as you're increase you ROI as you use less of your own money, hence it may enable to purchase another property with the existing equity. We also have access to lender who do 90% no LMI for certain occupations.

Adam, have you considered an evergreen LOC. These are designed on an IO repayment with some lenders requiring no review for 30 years (hence evergreen).  Rates can be slightly higher and qualification for a LOC can be more difficult today thanks to NCCP, but it achieves your outcomes as a set and forget IO loan.