The only way the government will lessen the burdan off high prices off lower income families is by giving incentives to developers to develop more low income housing.

taking away the tax benefits means less investment dollars will flow into developments, less property available means higher rents. how would this help people own there own home.

low housing affordabilty is not somthing new, look at any big city world wide, try to see if the average wage earner can afford a 4 bedroom house in londan, new york, tokyo or paris.

Australian cities are now entering the age where they have grown to the piont where they will become unaffordable for the average wage earner to buy a home it's completely normal and unavoidable.

yes there was a time where even a low income could buy a 4 bed house on a1/4 acre block,….  but those days in the capital cities are over.

what sort of investment stratergy are you looking at,

How do you think you would structure this deal to include your sister,
 
you have to make sure you are both on the same page, from the word go,

would you continue to go onto buy more together,
will you be wanting to buy faster than her,
do you both have the same investment time frame (will she want to pull her money out before you)
what sort of investment experiance does she have.

when do you propose to pay the Capital gains tax,…..  If you lend against the property and spend the money on lifestyle, this loan does not become tax detuctable,… what do you propose to do with the $1.8m you take out on the 60% lend,….

If I had 3mil worth of property with no debt I would suggest that you Just live of the weekly rental payment which a 5% rental yeild would be $120,000 pa,… I would then use the equity in those properties to buy more property and shares.

I seriuosly don't think the idea you are propsing would work.

I thought you had to be registerd for gst to claim it,..

Never be afraid to Increase the rent even if they are good tenants, after all you have to atleast keep up with inflation, It doesn't take much investing skill to accept a below market rent the only one who will suffer is you, especially if your investment is neg geared, what kind of idiot sits there letting there weekly rent get eaten up with inflation over the years as they fork out more for increased costs each month just because they like there tenant, a good tenant is one that looks after the property, pays there rent on time and accepts annual rent increases of inflation rate + 1.5%. if they winge about an increase inline with inflation and the market they are not a good tenant in my books.

Having said that, you must honour your lease just as you would expect your tenant to honour it,…. and Interest rate increases are not a valid reason for increase it is one of the costs that the investor must absorb, an interest rate increase is one of the risks you signed up for when you became an investor with a leveraged portfolio, would you lower your rent if interst rate decreased.

Foundation,

Does the 4% that the stock market has to drop before its back to the level that you sold out at include the dividends you have possible missed out on.

Look around for some companies you are interested in, look at there trading history chart, price earnings ratio, dividend yeild etc, and if there price seems to have droped back some, and made there dividend yeild and p/e ratio look good, and you feel the company is in an industry that will expand in the future then I say buy, even if the market does drop a bit more after you have bought don't worry its almost impossible to time the exact bottom, just be happy with the price you locked in and maybe buy more if they do drop. I usally have a default setting of investing a set amount every month so when the market is high my money buys less shares and when it low it buys more, this stratergy is called dollar cost avergeing it's a good long term stratergy and a good way to build up large holdings in some of your favorite companies.

Every one has heard the sayings, Buy low, sell High or Buy in gloom sell in Boom but the truth is many novice investors do the exact opposite, they see that the market has boomed so they get excited and start to buy in at high prices ignoring the figures, then the market drops a bit and their shares lose a bit of value and they panick and sell at the bottom of the market when they should be buying,… they then go and spread horror stories to family and friends of the dangers of investing in the stock market.

I would stick to your guns on this one, tell the tennant that you will only keep them on month to month if they pay the $380.00 if that is what the property is really worth, they are not going to want to move twice.

But on that an Interest rate rise is not a valid reason to raise the rent, as investors interest rates is one of our risk factors and a cost we must absorb, after all would you lower your rent if interest rates dropped 2%.

Rental increases come about because of a mix of increased housing demand, Inflation or scarcity of a particle property type,

Probally best off building a duplex yourself,… they don't sit on the market long when the both dwellinga are for sale unless they are over priced, real estate agents know property investors love this types of properties and normally can sell them pretty quickly to some one on their hot list of buyers,