Yep, good advice as always from Terry.

Another reason for the IO option is that if you ever plan on owning a PPOR in the future, you can take the cash from your IP offset (which increases your deductible debt) and place it on your PPOR (reducing your non-deductible debt).

Cheers

Jamie

Hi naledge

Welcome to the forum.

Age is only a number.

The bank doesn't care that you're 19. They care that you have a) A deposit to put towards the deal b) That you can pay the loan

Your right about that $15 p.w profit not being worth it. It would be a waste of time. However, what if that $70k unit was worth $140k in 10 years time? Is it now worth it? That's generally what investors are after, the long-term capital growth that property can offer.

Imagine having a few of these units, all appreciating in value while the tenant and tax man help you make the repayments?

Read up, do lots of research and save some cash. When the time is right, you'll be clued up and ready to enter the world of property investing. There's a heap of good books – if you do a search on the forum you'll find some recommendations. Grab them from your local library. Free resources like this forum are priceless – pardon the pun.

Starting young is great – and I'm all for it! But make sure you balance it out with living as well – you're only 19 once!

Cheers

Jamie

reeeen wrote:

I have done some more reading and have another question I'm hoping someone can help me with… sorry

Positive or negative gearing…

I know that each situation would be different for each person but can you do both, for example buy a positively geared house and use the extra income to buy something that is negatively geared so that you break even… but in the negatively geared one you'd be hoping for +cg's… what I'm trying to ask is can you have both?? positive gearing and positive capital appreciation??

If so would it be a good thing or would you end up paying too much tax?

Hi Reeen

It's perfectly fine to have both types in your portfolio. I've got a mix of CF+ and CF- which balances out somewhere around neutral (or slightly negative).

As for positively geared and decent growth all within the one property, Margaret Lomas's book "20 must ask questions" has some great criteria for identifying those types of properties.

Cheers

Jamie

Haha, I'm going to cut out an arch in a wall and remove a fireplace. Wish me luck!

Hi jcar

Yep, you have to pay land tax and rates on your IP. It's a special little ACT thing

On the flipside, you can claim your stamp duty within the first year of purchasing the IP. So that property you purchased in December 2010, you can claim all the stamp duty in your 2010/11 tax return (again, this is special to the ACT).

Cheers

Jamie

Hi John

My understanding is that buyers agents fees aren't immediately tax deductible. It forms part of the cost base – so is claimable when you sell the property.

Cheers

Jamie

Dolf De Roos has a basic book on easy reno's that add value. I can't remember the name of it though. Bunnings has some nifty DIY factsheets that seem to come in handy for renos. Youtube can be good as well – I learnt how to tile watching a few youtube clips!

Hi Alister

Sorry to hear about your situation.

Selling the home yourself will reduce costs – however, it can also be quite stressful (which is something you obviously don't need right now). It might be best to speak with some real estate agents in your area – get a feel for how much the property is worth, what their fees are and also explain to them what your intentions are in terms of being able to rent it back. They may have investors on their books that would be interested.

Also, as Jac said above (and I'm not sure how this fits in with forum etiquette) but why not post the details on here.

Cheers

Jamie

Another way to acheive the same outcome would be to convert this loan to interest only with an offset attached – place any extra repayments into your offset account. You can than withdraw this money at any time at no cost and no hassle.

Completely agree and that's the message I always try to get accross. If you haven't got the discipline to make regular repayments into the offset then an IO with offset might not be the best option.