I recently attended a custodian seminar (Fitzgerald was not the speaker).  I was pretty happy with the seminar, but not the sit-down with the speaker afterwards….he spend the entire time telling me that I don't have enough money to live and my marriage must be suffering (neither is true)…..

Richard, we've only been told his since the gfc (before that we were pre-approved to buy, but chose not to).  It is good to know other lenders may still be interested in loaning us money as we're hoping to buy again next year.

The problem with Moranbah is the rent can drop dramatically and suddenly.  The house I am currently living in was rented for $1200/week last, now my hubby's employer pays $600/week because we moved in during the gfc.

Its important to understand why the rent is so high-it's not because (as the opening statement said) families can pay $1000/week, but because mining companies will pay the rent.  A few years ago the rent payed by BMA (major employer) was capped at about $700/wk.  This basically meant rents in the area were capped at about $700/wk.  Once BMA removed the cap the rents sky-rocketed.  Currently BMA is trying to open a new mine in the area with 100% of the workforce being fly-in/fly-out.  If this goes ahead, BMA may stop offering employees accomodation and rents will fall.

If your offer is rejected, make sure you call in a few weeks and see how they feel about it.  Like Dwolfe said, if the property has been listed a while they'll start getting desperate.  A desperate seller is just the type you're after.

just excel and annuity formulas

here are some figures to think about
(I have assumed the following: interest rates @ 7%, you continue to add $45k pa to your mortgage, you bought 12mnths ago, initial mortgage $260k, 25yr mortgage, min payment 1838/mnth)

Scenario 1-pay of your home ASAP and save your money
You pay it off in 4.5yrs (from12mnths ago).  You save $247k compared to min repayments.

Scenario 2-pay off your home ASAP and buy IP, paying it off ASAP, and continue
Assuming property values double every 7yrs, rents do the same and are worth about 0.1% of the property value, allowing 40% of the rent for various expenses, depositing 20% on each IP (to avoid LMI) and saving this up.  You continue to pay $5588/mnth plus the surplus from the rent.  After 21yrs (from today) you will own your own home, plus 2 investment properties.  Each property worth approx $3.44M

Scenario 3-refinance your PPOR to buy 2 IPs immediately.  Every 7 years buy 2 more IPs, using IO finance on all except your PPOR after 21yrs you would have 6IPs.  Assuming your 1st 2 IPs were worth the same as your 1st property, and all double every 7yrs, all worth approx the same value.  Each property would be worth $3.44M after 21yrs.  You could own your IPOR, owe $6.3M on your 6IPs.  As you can see, you could sell just 2 of your IPs to owe nothing and still have 4 IPs to retire on.

For scenario 1:  From the rent rec'd for the entire year, subtract all of your expenses including; interest, insurances, rates, water, REA fees, maintenance.  What ever is left over you pay tax on.  This is called positive gearing.  If the expenses are greater than the rent you claim this loss at tax time.  Your taxable income for the year is reduced by this amount.  Called negative gearing.

I am not sure exactly how scenario 2 would work.  I think you would try to work out what percentage of the house is being rented, and that same portion of the expenses (interest, rates, repairs etc) would be taken away from the rent.

HTH