WOW!

Been away for a week and look what happens!! HIJACKED POSTS!
Terry, Richard and YI….thanks for you time and effort, im sure one day myself and others will take over the reigns from you guys and help the next up and comings.

I havent had an inspection yet as this area is 3hrs away from Syd metro, but i will be planning once my holidays cease to exist and back to making an "active" income.

YI, thanks for some "creative" suggestions into securing the IP. If my DD (due dilligence) turns out to be worthwhile i might use some of those suggestions. much appreciated

another thing i would like to share:
spoke to a friend who was accountant specialising in property (now in commercial tax), she said that there are 2 main types of costs

1.     Capital costs:these are most commonly called improvements costs, and there are two ways in which to handle them in the tax system:
              i)      If its a PPOR, any improvements/additions/items that are going to be left with the property can be deducted from the capital gains. You must have the original signed front page of the sale contract to establish/prove the base cost of the property (she said many people don’t have this at hand when selling/seeing the accountant and are in a made rush trying to find out where to get it, so she suggested to have it filed ready when selling) and receipts/invoices of all the improvements etc, what helps if these were on a spreadsheet and that the invoices were in order as displayed in the spreadsheet. This will save accountant costs sifting through all the invoices and creating a spreadsheet.
            ii)     If its an IP, any improvements/additions/items that are going to be left with the property can be deducted against the income over a period of time which is called depreciation, one should engage a quantity surveyor to deliver a ‘schedule of depreciable assets’  to give to your accountant. 

2.     Investment costs These are costs associated with securing the IP eg. Stamp duty, LMI, conveyance, solicitors, application fees, valuation fees, building inspections and interest on the loan. These are tricky and i don’t know how they are handled in the tax system, from what Terry and Richard are saying that some are considered capital costs and others are deductions similar to those depreciable assets, i suggest see your account to establish which costs go where, but remember to keep invoices. 

Leave comments or amend if i have got it wrong, but hope it helps out there.

DWolfe, no worries hijack all you like…..just dont terrorise!

I get you Terry. but my PPOR will be turning into an IP in 5 months (to satisfy the FHBG) and moving into parentsto save and get more IPs.

I too have been told by my MB to get at least 10% deposit, legals and stamp duty in order to get my loan. I dont know where i can get a 100% loan?

anyone want to help me?

Richard,

thanks for the quick response.

20% deposit is one of the conditions for Steve's 1% rule to make sure it is CF+.

So you are saying that i should grab this with a 100% loan. maybe even more than a 100% loan i need to cover stamp duty and legal costs.
I called the agent and they confirmed that it is currently leased for 12months for $220/week and the asking price was $159,000.
I too thought it was too good to be true.

I have planned to inspect this week.