Is a handwritten receipt in one of those carbon copy cheapie receipt books from the newsagent with date, amount, details and sellers name honestly enough to substantiate a receipt for tax purposes? so i could seriously claim the $200 fridge from gumtree and the washing machine i put in my IP?

I managed to buy a house in Brentwood, 10km south of perth (borders mt pleasant and booragoon) with direct freeway access, walk to train station, walk to shops etc… for $417k, settled in Feb. Did minor cosmetic work, renting it out to international students, plan to hold and rent for a few years then demolish and build luxury house on the block – as the suburb is in transition.
Never expected to be able to pick up a house in the postcode of 6153 in my budget, but by watching realestate.com.au i managed to find this one and it ticked all my boxes.

i keep reading that bassendean is recommended due to proximity to city and constant improvement to the council area. was just looking in carlisle, cloverdale, queens park areas in the last few months – cloverdale has a number of large blocks well priced, but u'd have to pick the location carefully – no point buying a large block, subdividing and building gorgeous new houses when you're surrounded by dumps and right underneath flight paths.

stretch your 10km radius to 12-15km if you're looking for a house + land under $450k, but don't give up – they're there, just be certain the properties are worthwhile and meet your criteria before just jumping on "a bargain"

good luck!

other option of course is finding another investor with some extra $$ who can share risk/costs/profit etc and increase the price range you're looking at.

Quick question Richard, if you don't mind me hijacking this thread…

your comment about the LMI being deductible over 5 years caught my attention. I paid LMI on a loan for a property initially PPoR, and then living in for 1.5, then moved out and it has become IP. Does that mean I can claim a portion of the initial LMI paid once it was IP up to the 5 years?

damn… wish i knew that before…

can u claim retrospectively?

interesting to see this thread has resurfaced… one year on… so michael and loretta, did you do the course?

Some factors to consider with units:

*usually have to pay strata fees, make sure you know what these are upfront and budget them into your rental returns. paying $500 a quarter can make a dent in that rental income!

*the strata fees include building insurance, so you are saving $$ with this, and I suppose in most complexes includes garden care

Perhaps its best to research your areas and figure out your finances before choosing house vs unit. Who do you want to rent to? What is in demand? The preference for house vs unit will definitely vary with the location, as will the tenants.

Do you want to purchase a house near a university, could be rented to uni students. Or a suburban house walking distance to shops and primary schools ideal for a young family. Or an apartment close to public transport/the city for young exec workers?

Get your budget first, then start your research into good areas and see what's in demand.

Something you can do is if you find a location you may be interested in, go and meet with a property manager in that area and ask them what properties are in demand by their tenants and if there is an oversupply or undersupply of any one type.

Cheers,
Emma

Well done on clearing so much debt!!

One thing that is worth considering, is that banks need evidence of “genuine” savings for your deposit, and the more you have saved the better. They want to see this over a minimum 6 month period. I assume you’re going to put the $750 f/n away as savings once you’re finished with these debts, which should be in around 6-8 months? so if you’re planning to save for another 6-12 months or more once you’ve cleared debt, then all is good. but just in case you’re getting gifted some funds or hoping to buy something sooner, you may consider starting a savings account now and putting away $50 f/n or something. its not much, but does show a savings pattern.

Did you confirm that the high interest loan is allowed to be paid off early? some of those lenders have penalties for early payouts, so make sure you are aware of these. if there are big penalties it could be better to pay off the other loans quicker. This is along the lines of what Sonya was saying earlier.

Congrats again on working hard at clearing that debt. you’ll knock off loan #3 fairly soon too and then be down to 2. just make sure you don’t slip into these habits again and build up more debt. The only debt that’s really good for you is against appreciating assets/investments.

i'm not sure if this is applicable in NSW, but in WA when you make an offer to purchase you can put various clauses that the offer is subject to. I would state a clause that the offer to purchase the house is subject to the vendor providing evidence of council approval, or if not available then the vendor lodging the application at their cost…

i just don't know if this process works elsewhere!

This is my understanding of the R Codes…

Take 10,000 and then divide it by the R code number to get the minimum block size. so for R20, must be 500sqm per block, and R25 must be 400sqm. That is to divide into green title blocks. R20 can have 450sqm if they are strata blocks…

So it should be fine to build 3 green title house+land on the properties, however you may possibly be able to build 4 or more if you investigate strata titles. Depends on the council really. You often see exceptions to this, for example I am considering purchasing a house on a survey strata block of 349sqm in a R25 zone. It all depends on what other developments are going on, location of the block…

hi fWord,

I was in a similar situation to you back in 2005 and will share my story…

I was a first homebuyer, received FHOG, but luckily was referred to an excellent mortgage broker/financial planner, who has keen knowledge and experience in IPs.

This was what I told her:

*purchasing PPoR with FHOG

*planned to live in for 12-18mths, then move overseas and rent it out

*upon returning to Aus, may continue to use it as IP and purchase another one

*needed to save money whilst paying off PPoR for o/s adventure

*I was of the opinion I should pay maximum affordable onto loan to pay it down quickly

This is what she set up:

*variable interest rate (damn nearly killed me while backpacking when it was well over 9.5%)

*100% offset account, with no monthly fees and unlimited transactions

*have all income paid into my mortgage

*live off my credit card, then pay it off in full each month from mortgage

*every extra $$ over and above minimum interest repayments sat in offset account, available for redraw any time, and reduced interest payable on loan

*when ready to move O/S I took the funds needed out of my redraw. rented it out, and got the rental income paid into it

*she advised this set up is in essence same as P&I in terms of reducing the loan while I can, but then instantly converts to an I/O when I change it to IP and want to keep repayments high to offset rental income.

The features which I appreciate the most are the ease of online banking and the complete fee free account, so I can do unlimited online funds transfers. tho i can't do BPAY, slightly annoying, but i just transfer into my everyday transaction account and then straight out again.

Thankfully due to Perth's boom, I'm not in a great position with equity and looking to rapidly expand my IP portfolio, and eagerly waiting for my broker/planner to return from her holidays so she can get things up and running!