I think neutral is fine if it delivers capital growth like Shahin mentioned. It is better than negative because it ain't costing you anything, and it'll turn into positive geared property with a rent increase. I like the idea of neutral gearing.

The tricks that tend to get re-stated in forum are:

1. ONLY pay INTEREST, not PRINCIPAL.

2. I would suppose that after a few rent increases, even $5 per year, you would take a property from neutral to positive fairly quickly. 

3. I seen my bank has a three year fixed rate at 4.99% now. I fixed mine at 5.32!!! I hate when things like this happen

4. You would also need closing costs for your purchase, not just deposit. I imagine the advice others will offer is, 5% deposit (10k) then the other 10k for stamp duty and legals, so your loan would be 190k, not 180k.

Others in forum far more knowledgable, but that will get the ball rolling I'd imagine

I got it when I purchased my PPOR last year. I was pretty naive, and sus on it, but I directly asked my conveyancer and she told me that she doesn't get any commission or kick backs from using it, so given she had nothing to gain, I got it. 

She said the other options were to get a surveyor to check boundaries, and something else done, costing $1200 from memory, or to buy the title insurance which was… I forgot, $200 maybe, I can't remember. Either way, I went with it as the cheaper option as I figured my boundaries were probably right. Units next door, gotto have imagined they would have built to the right boundary, and as I have a semi, the fence runs along the divide in houses on other side. 

That's my 2 bobs worth, others more knowledgeable would be able to explain it better than, 'it was good, cheap option at the time'. 

I do enjoy reading your posts Freckle.

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On the flipside, are you suggesting we invest in a large acreage in the middle of no where in order to set up a farm to cash in on the low food production in 40 years times? 

Bugaloo; I've only just started in the past two months to investigate the property game, so forgive my explanation.

1. They are saying to have an offset account, it's like a redraw, but just an account attached to your loan.

– If you owe 200k on your loan, you pay interest on 200k

– If you had 50k in 'offset' account, you havn't paid any of your loan back, but only pay interest on 150k

– If you have a redraw facility, you're paying off the loan principal, the comment was, you can't then take this money to use on personal expenses and still have a deductible loan – because your personal expenses don't produce income for you.

– Whereas, the offset account is just money sitting in an account, your principal was never changed, just the amount you paid interest on. 

– As far as I can see, in the interest offset account, you're saving interest of at least 5.9% (variable rate), whereas if you put your money in an account, earning interest, you wouldn't get 5.9% and you'd be paying tax on the interest you make – so it becomes a save interest on loan verses make less interest, but get taxed on it.

Hope my basic understanding has helped it click in your head; 

I am in agreement; those older homes with cheap looking wooden panels for walls… YUCK!

What's 'Blue Board' – is this a type of gyprock? I remember dad talking about it being only a few mm thick and just going straight over existing walls. In my PPOR I have old walls (late 1800s) which were a pain in the arse to gyprock, then sand bank then they still had flaws, (I call them character bumps). – but yea, do the world a favour and get rid of some of those ugly walls!!

Sounds to me like you're talking bout a picture rail going around the wall. If you're boarding over the top of it, well, wouldn't you have no choice but to take it down? To me, the ugliness of the wooden walls needs to go, no picture rail is redeeming enough to warrant them!!

When I moved away from home to Uni (Wollongong) mum and dad bought one of these homes for me to live in, with site fees being the only costs. Was cheap and convenient and the sand was also about 100 metres away (park was located right on the water, between two flagged beachers). The big draw card was that it was boom gated to get in, and security monitored site each fri-sun night. 

I was there for 5 or 6 years, and when I left mum and dad sold up.

Was a caravan/permanent annex site –> completely gutted inside, and cladded outside. Dad is a builder so no labour costs, about $15k all up. The original buy was also $15k. They sold it for 80k. So they were pretty stoked that with that. Where else can you nearly tripple your money in 5 years?

Possibly depends on area. I live in old area, my PPOR was built in 1860, with later extensions. In my area everyone uses palings and they suit the area. In a new estate or with new 'modern' houses, fair enough, colourbond works better.