Hi Epsom,

The most important thing to remember is this:

PPOR – your mortgage and related costs are not tax deductible
IP – interest and borrowing costs are tax deductible

Your goal should always be to reduce your non-deductible debt, and use the deductible debt to leverage your investments.

You have a PPOR with a decent amount of equity in it, so use this equity to fund your IP purchases. Keep your own cash for the PPOR and living, and borrow for the IP.

The longer you wait to invest, by waiting until you’ve paid out your PPOR, could potentially reduce your returns.

I am by no means a financial advisor nor an expert, however based on the limited info you’ve given us – you’re in a great spot with good equity in your PPOR and an offset account holding your savings. You should be able to get a Line of Credit (LOC) from your lender with your PPOR and use this to fund your IP deposit, then get the rest of the loan with another lender. The LOC interest will be tax deductible, and the interest from the new lender. Doing it this way keeps the loans separate. If you were to use your own savings to fund an IP deposit, you would lose access to your personal funds and not be able to claim a deduction for this. Although of course the less you borrow and the more you pay yourself means the more chance of the property bringing you some rental income…

Keeping your savings in the offset account means you are reducing your non-deductible interest considerably, but can still access your money. if you’re keen to pay off PPOR a little quicker, can u look at increasing your principal repayments?

I would recommend finding a good mortgage broker or financial planner and going to them with your exact personal situation and see what options they present to you. Don’t be afraid of debt, see it as an opportunity to make the bank’s money work for you and make you more money.

you could always try putting an ad up on gumtree too? loads of people there looking for accommodation. depends on your target market for tenants, as gumtree does tend to attract more younger couples, single parent families, student groups and some single mature age tenants. well in perth it does at least!

Could you make your ad stand out with some marketing, perhaps offer tenants one week free rent for a minimum 6 month lease signed before 5th July? Do this without dropping your rent again, otherwise you’d be struggling to recoup costs.

Hi Mark,

I wonder if looking into vendor finance for yourself is really the best way to go, given your short term goals. If you have not owned any property to live in before, then yes you would be eligible for FHOG. What some people don’t realise is that if you purchase an IP, don’t claim FHOG, and later buy a PPOR you can claim the FHOG at that time (providing IP purchased after Jan 2000) – http://www.osr.qld.gov.au/first-home-owner-grant/eligibility-fhog/index.shtml

To buy using vendor finance does mean you are paying a premium rate, and if this is PPOR then not one cent is tax deductible. Given the property market at the moment, you may be waiting some time to built enough equity in this home to be able to use it to start investing, unless you actively add value through renovations. An alternative option may be to continue renting and purchase an IP, therefore all interest is tax deductible.

Speak to a good mortgage broker about what options you may have given your personal income situation and ability to prove income. I think a lot of it depends on how long you have been self-employed and what records you can show. Richard Taylor often pops on this forum, user Qld007, not sure if he’s Brisbane based or elsewhere in Qld, but he certainly knows his stuff! Or look for other recommendations in Brisbane from other posters. If you’re comfortable dealing over phone/email I’d be happy to recommend someone in Perth! But having a local broker makes posting of documents and meetings that little bit easier

Felicitaciones! mi esposo es latino tambien. Be aware for claiming tax deductions for travel you should prepare an itinerary which shows the trip and %investing work and %personal. Buying a house in Bogota, then booking a 3 week holiday to visit your wife’s family, during which time you spend 1-2 days at your property will not make the whole trip tax deductible. You’d also want to be looking at the stability of the government. For example in Venezuela just 4 or 5 years ago, President Chavez created a rule that any Venezuelan’s who owned property and were not residing in them or had family in them, and if they were out of the country, the government had the ability to confiscate their house. This meant a good friend of ours had to leave Australia suddenly and return to Venezuela to claim her own house and ensure the government didn’t take it. Now Colombia is fortunate not to have chavez there, but just be warned how quickly some things can change!

There are many educational courses in property available, with or without a mentor. There’s the RESULTS course, popular on this site – click the link on the right hand side talking about 1-on-1 property mentoring, but get in quick as it only has an intake once a year in june, possibly stretching over til july. There’s a host of other programs out there run by other people, either 6 months, 12 months, weekenders, etc. I’m not personally familiar with what property groups regularly meet in Brisbane, but I’m sure there are some.

good luck!

chao
Emma

quick question as it seems relevant in this thread – where do you find info about if a house is DOH? I know in some councils with e-maps you can see ownership of land and if its listed as crown land with a house on top its a fair assumption its state housing. But is there another eway to research % SH in a suburb, or locations?

I have also joined. Thought about it years ago, but ended up buying a one way ticket overseas instead and becoming a backpacker I got in touch with a lot of people about RESULTS to seek individual feedback, and finally committed on Wednesday. I spoke with Brendan on the phone a number of times, found him to be friendly and helpful.

From what I heard in feedback, most people said its a lot of work, you need to put the hours in to really maximise your gains from it, however even just the due diligence training and spreadsheets you receive and the mentoring alone make the cost worthwhile.

Looking forward to it. I’m hoping it will accelerate my purchases and improve my profits, by ensuring I make better educated purchases and completely understand the number crunching side of things. Its more reliable than the gut instinct and small research I did for my two IPs.

Emma
(Perth)

i think there should be a rule on this forum that first time posters are not allowed to name companies… call me a sceptic, but the only commenters above with opinion or question of this company are all first time posters. posting months and months apart, just to bump the thread.