PS if you surf through loads of the threads on this website, you will notice one piece of advice keeps getting repeated.  Use Interest Only loans with offset accounts.  Just load all your cash into the offset rather than locking it in the home loan account.  Then, when you want to get another investment property, you have cash readily available in the offset for your deposit

Correct. 

Obviously at some point, the bank expects you to pay them back for the original price of the house if you wish to keep it (otherwise you'd have to sell it to pay them back).  So if you never intended to sell the property, and let's say the property originally cost $200k, then you'd eventually want $200k in the offset, so you could give it to the bank and close matters off.

The general strategy these days seems to be to get a few properties, all interest only (as many as you can comfortably service without getting into strife if the interest rates go up a bit, or if you have no tenant for a while).  Let capital growth do it's thing, and at some point, sell a couple of properties to entirely pay out the loans on those you want to keep.   I’ve created a bit of an example below to give you a vague idea what people are up to.  Please realise the numbers are approximate.  It is a very very basic example just to help get your head around why people are doing the interest only loan thing.

So let’s say you buy the following properties:

House A : price $120,000
House B: price $150,000
House C: price $145,000
House price $300,000

After 10 years, you'd think they'd all double in value.  So resale prices would look like this:

House A : sellable for $240,000
House B : sellable for $300,000
House C : sellable for $290,000
House D : sellable for $600,000

Right.  So at the 10 year mark, your owings to the bank are a total of $715,000 (which is the total of the prices you purchased the properties for). 

Let's say you choose to sell Houses C and D. 

Here's how it would look, roughly:

House C you sell for $290k.  The real estate agent has to be paid say, 3% commission, which is $8,700.  Let's say your solicitor costs $1,000.  You've held the property for more than 12 months, so you get a capital gains tax (CGT) discount of 50%.  I believe the tax is then charged on the profit "above inflation".   I used this link to get a VERY BASIC IDEA OF the CGT payable if you were on an income of say $100k : http://www.yourmortgage.com.au/calculators/capital_gains_tax/ 

So we have: 

House C
Sale price; $290k
Minus agent commission of $8,700
Minus solicitor fee of $1,000
Minus what you owe the bank of $145,000 (original price of property)
Minus capital gains tax of $26,505
Leaves you with clear profit of $108,795 

House D
Sale price; $600,000
Minus agent commission of $18,000
Minus solicitor fee of $1,000
Minus what you owe the bank of $300,000
Minus capital gains tax of $57,230
Leaves you with a clear profit of $223,770 

So by selling Houses C and D, you have made a profit of $108,795 + $223,770 = $332,565

To completely pay the bank back for houses A and B, you only need $120k + $150k = $270k.  Conveniently, the profits you made from selling Houses C and D after 10 years of ownership means that you can do this, with a little cash to spare.  So you pay the bank bank and from that point forward, the rental return on Houses A and B  gives you an income towards a more comfortable retirement. 

Does this help?

Hi dreamerman

Welcome to the forum and I hope you enjoy your time with us.

Structuring your loans correctly to safegaurd your assets is probably something you wont read in a typical book but can certainly recommend any of Steve Mcknights books for education.

Again hard to make structured suggestions without further information.

By the way not every deal is negatively geared, positive and neutral geared (especially after non cash deductions) deals are fairly common so no reason to be be loosing cash each month if you dont have to.

Just be cautious there is many a shark out there happy to take your money off you.

Hehehe I once attended a seminar that advised against discussing property investment aspirations with friends and family. 

Perhaps try mentioning to your wife things like this:

Property goes up in value approx 10% a year.  Your salary does not.  So the market is rapidly pricing you out.  Get on the boat quick.

Look at the ageing population.  Do you genuinely believe there will be a pension for us when our generation is of retirement age?  Doubtful.  Either way, I'm assuming there will not be, and looking after myself.

Look at what happened to superfunds with the arrival of the GFC.  Not cool for people who are already retired and having to draw on the funds.  They don't have the luxury of waiting for the market to recover.

Basically, in my opinion, you can't afford NOT to buy property.  You don't have to buy mansions.  Just affordable stuff that you can find tenants for

That is scary stuff.  When you consider that it costs $10 to buy a steak in the supermarket, it's pretty obvious that the food bill per person per week easily clocks in at $100 or more.

When I am retired, I don't particular fancy having to answer to a landlord.  Or being asked to move from my little comfort zone of home because the landlord wants to do something else with the property.  No thankyou.  Pretty sure I will be set in my ways and want to feel settled in my home.