Kenzel,

It may pay to consider Here to Learn's suggestion. If you are in a position to stay with you folks a little longer, you could purchase an IP in an area where you could purchase for $150-200K. This obviously requires a great deal of research on your behalf on the potential IP and its future potential. If the property is never used as your PPOR, my understanding is that you still retain your eligibility for the FHOG in the future. A good IP choice may see you even further ahead then just continuing to save the balance you require to be where you want to live. I recall an article in API several months ago about this. I think it may have been titled "Gen Y's" or similar, and was on the cover (picture of a slick dude with sunnies on!). Have a look on the API website for the back issues.

All the best
Tammy

I prefeace this response by first saying that I am not an accountant and suggest you ask one.

However, my understanding is that if you withdraw equity from an investment and use it for other than investment purposes then the interest for this loan is NOT tax deductible.

With regards to the ongoing potential negative income (assuming it is still negative if interest is not claimable) my understanding is that the negative amounts compound year after year and are deducted against future income (ie sale of a property or other income).

Cheers
Tammy

Type in DIY conveyencing into Google and you will find several companies with kits and instructions if this is the way you choose to go. I have also had an interfamily sale (I  was the seller) and we used the same conveyencer (just signed a stat dec saying both parties were aware and agreeable to the joint legal representation) and this reduced not only the cost but also the turn around time therefore a shorter settlement period. I have also conveyenced my own, this is not too hard IF you have the time and inclination. Now 2 children later, I am happy to pay the conveyencer (who is cheaper than the solicitor). Horses for courses but there are a couple of options.

All the best
Tammy

I really think it is a two way street.
On one hand are those folk who either dont have the knowledge and/or inclination to face up to their economic reality and on the other are the financial institutions who supportthis.

I recall a few years ago meeting a man nearing retirement, with quite a decent blue collar job, whose aim was to die $1million in debt!!!! This was not a home loan (lived in work supplied accomodation) this was to be all bad!! He was very proud of the fact that he had managed to aquire a lot of credit cards that he fully intended to run up before he died. When I asked what happened if he lived longer than he thought – his contingency – BANKRUPCY (the car was in his wifes name and he didnt own a house. To his mind, if “they couldnt find what I have bought then they cant take it off me and I will be better off”!!!!

This has to be a legal scam doesnt it?? With all of us who play by the rules paying for it!

Just my gripe for today.
T[angry2]

Dont confuse a moral issue with a financial one. If this lady is a good tennant and is willing to pay her rent 12 months in advance and has had a good rental record, and you didnt know her occupation – would there be an issue. Perhaps her nondisclosure was due to being rejected by other prospective landlords. Now I am not saying lease it to her, you alone have to feel comfortable with that, I am just suggesting that everyone had their own story and perhaps you should not judge too quickly.

T

I am pretty sure I have read a forum thread related to this previously. It went along the lines of this arrangement being called a “pillar and roof” (or similar) where the +ve cashflow properties are the pillars that hold up the -ve cashflow “roof”. Once that is achieved (ie 4 +ve plus 1 -ve), the buyer goes on to reproduce the “building” I think the poster was one of the forums “big” guys so perhaps they would care to comment. I am sorry I cant recal the name.

Good luck
Tammy

I too have been asked for an initial deposit prior to exchange of contract (obviously taken off purchase price). The reason given was that it would secure the proerty during the time until exchange of contract ie keep it from being sold to anyone else. It was my first ever purchase and I paid it (only $1000). The reality is that until there is a legal exchange of contract anyone can purchase the property and the “good faith deposit” has no legal bearing. I think this is where some people consider themselves guzumpt. In the end I guess it comes down to the ethics of the REA ie selling after an agreement has been reached. I have never since paid such a deposit and the only deposit I pay is on exchange is is the minimum I can get agreement on (typically $1000). Unless you agree to an early release of the deposit to the vendor, the deposit cannot be touched so I dont see the need to offer a larger one if you can get away with it.
T

Have a look in the yellow pages under House Movers (Removers). They are generally listed with or near House Restumpers. These guys will be able to fill you in on the correct proceedure. Get several quotes and ask to see or speak to previous customers. As for the house, you will quite commonly find them for free or very little money in the Sydney area, particularly where land values have increased greatly. I helped my parents organised the remaoval of one from North Sydney to regional northern NSW. The house had been fully renovated 2 years prior and the only obligation was to clean the site (less than 10K and taken care of by the house movers). They ended up with a completed house for about $90K
Things to consider
– Cost of relocation (the above was $55K to move 500 kms away)
– Council approval a) to remove the house and b) to put in on your block
– RTA approval to transport (there are rules governing the time of day very large loads can be on the road, access for the vechicles, they must have pilot vechicles and ours needed police escort when going through towns where there wasnt a bypass- bit of an overkill, but rules are rules!!!)
– how much will you need to do to the house at the end? That is not only any desired renovations but also the cosmetics of plastering and repainting where they have cut the house in two. They literally take a great big chainsaw and cut it up. At the end they are only responsible for putting it back togehter so it is structurally sound and waterproof (supposedly)
– check out if the mover will also be the restumper or do you need another guy – more $$
– be very nice to your local council, htey need to approve it coming, as well as the putting it back together and be satisfied to give a certicicate of occupancy ie it will need an engineers thumbs up,
– plumbing and electrical reconections
– re the house mover, check how to pay them. Strongly recommend that at least a large portion not paid until an engineer inspects.
Sorry for being long winded, and I probably have left a few things off. I agree that tit is certainly a viable option –IF– all the due dilegence is done correctly.

All the best and if I can offer anything else please ask. PS sorry I cant recommend the guys we used, too many of the piers were incorrect causing cracks to appear up to 6months later hence the reccommendation to see and speak to previous customers. There are a few cowboys, but I am sure there are quite reputable guys as well. Good luck in finding them.
Tammy[biggrin]

Hi AJB

A possible suggestion is to keep the rent at your ideal but to offer a rent free period, say a fortnight. On a per annum basis it may work out the same as a lower rent to the tennant, but would allow you to onsell with the higher rental agreement in place.

All the best
T