Ask the agent. That’s what they are paid for.

I fix my loans. Pro and cons with doing that. I just fixed mine for 4.3% for 3 years interest only.

You can’t raise rent if the tenant is under a lease (as far as I’m aware) unless it’s stated in it, even if they are not on a fixed lease you can only go to market rent. At least in the ACT.

Renting and investing elsewhere is a perfectly fine strategy, but immediately I thought of the following option – and since I don’t know your age, where you live (maybe Sydney?), whether you want to get married / kids etc, local house prices, whether you could get the FHOG etc… it might not be the right one. Also, as my name suggests, I am only relatively new too.

Buy a home – $500k. Use all $200k as a deposit. $30k in Offset (less stamp duty etc) – might not leave much depending on where you live.
Redraw $100k for investment purposes from your home.
Buy $400k investment property, from the $100k use 20% deposit, stamp duty, etc.
Let you brother pay you board to help cover your mortgage.

Loans:
$300k – Non Deductible home loan. PPOR.
$100k – Tax deductible purchase costs for IP. Held against your PPOR. Interest only.
$320k – Tax deductible 80% loan on your IP. Interest only.

Now you have $900k in property, $720k in loans, but only $300k in non-deductible debt and $420k of interest you can claim on your tax. You have rent coming in from your IP, and your brother to help cover your mortgage rather than a landlord somewhere.

Lots of things to consider going this path though.
– Will you be buying a place where you want to live for a long time?
– Will your PPOR still be a reasonable investment?
– Can you buy a house for $500k that you want to live in for a while?

In regards to the capital gain you outlined, is that where you are thinking of investing – is houses, units or both? It seems very unstable if it is. Imagine buying in 2012 and having to sell in 2013? You’d be a long way behind after buying and selling costs, and then depreciation.

I’m just curious about where you live, do you rent? Do you want to buy?. If you plan on buying a house to live in in the short term it might change your plan.

For me total return also includes capital gain, so 1% in a regional area with no growth isn’t anywhere near as good as a neutral property with 7% capital growth. This is especially true if I have high serviceability but low deposits as I can redraw on the growth for the next property.

• This reply was modified 8 years, 5 months ago by  TheNewGuy.

Speak to a solicitor ASAP! If you can’t void the contract due to the pests, most have the ability to do it on finance, and I would just claim that.

Sounds like a crap job I’d keep looking. From an employment perspective I guess you’re a subcontractor so that’s how they get away with not paying you for anything.

My advice is definitely not professional! But it would come down to specifics – how much income will the apartment generate (net income, Ie less expenses and tax), what loan amount your income(s) will allow and whether you think the apartment is a ‘good investment’ – capital gain etc.

All I will add is the more property you own the greater the capital benefit. Ie. If you keep the apartment and property goes up 10% that year then you’re better off having more than less. Finally, there is a difference between making money (rent) and saving money (less home loan repayment).

That probably didn’t help!

Definitely still depreciation. I bought a place that was 20 years old and still claim thousands per year.

$100k equity should be enough to get a deposit ($80k accessible, maybe some LMI) then it’s a matter of serviceability. So depending on your incomes you could be in a position to buy an ip now.

Interesting question. The main issue I find is that the goal moves faster than you can save. For example, if it’s $100k and it takes 2 years for you to save that much in two years time it’s $150k, or worse it moves faster than you can save at all and you never reach it. The other factor is it depends on your goals and where you’re investing – Sydney would require more than regional areas.

At the moment I work on $100k as that allows enough deposit to buy something around $400k mark. But I don’t tend to have issues with serviceability either, which is another factor.

Not sure that really helped but I’d be interested in other opinions too.