To turn your home into an investment property? To do or not to do? Opinions needed!

[Astrid]

A friend of mine (who I think was in the same town as you) did the same thing. Turned her primary home into an investment property and bought closer into the city. I would definitely check out a good accountant on this one and also chat to your bank as the loan type may need to be changed.

I know what you mean about the travel, I am about the same out of town. We are spending atleast $10 per day on fuel and that is just the basics, no extra running around. We have land here though, no neighbours etc, so are happy to put up with the distance. I am trying to get more organised with travel and with grouping activities together or just foregoing some if it means 2 trips into town that day.

[deletedit]

The interest on your home loan IS deductable, you CAN claim it, you don't need to refinance to an investment loan. But, only that amount is deductable - so if you have redraw and take that out, or top up the loan to get a car or something, that extra amount ISN'T. Rates, maintainence, property manager fees are all deductable but large upgrades that are well over and above repairs (new kitchen etc) aren't, you have to depreciate those over several years.

I tried to sell my last house, couldn't, now it is rented out.
Going to have timing issues selling our current house, so it'll probably get rented out too. You can rent a house out here within a week, selling takes months.

There's always a catch though. You have tenants. And tenants are humans, with all the foibles humans have, so if you get unlucky you'll have issues and probably not earn as much from the house as you thought you were going to, or they'll not look after the house as well as you would. My tenants have indoor dogs and cats ... OMG ... so much hair!

[Jahzara]

Me again !

I have no advice of course apart from - yes i think its a great idea for many reasons if you can do it !

Closer to town = good !

OK - i'll go now !

[deletedit]

Oh, did you get the first home owners grant or stamp duty concessions on this house? If so, that's a whole other kettle of fish

[Arimeh]

Oh, did you get the first home owners grant or stamp duty concessions on this house? If so, that's a whole other kettle of fish

Nah tassie doesn't have any concessions with their stamp duty when you buy a house down here - makes no difference if its your house or an investment house - you pay the same rate of stamp duty. The only thing that differs is the land tax that is payable if its not your residential premises, but I rang about it today, and ours is $0 because its worth under $25,000 (the land value) and you only pay over $25,000 - but even if it gets to over $50,000, its like $180 for the year or something.

[misty]

I would go for it.

It may be worth getting advice from an accountant for peace of mind, but just check that the accountant has experience dealing with investment properties (or even better has some themselves) - it is amazing the numer of accountants out there who give out incorrect information.

Also check out the ATO site - they have alot of useful info on there, and ringing the ATO direct is sometimes more helpful then the accountant - just be prepared to wait on hold for a while.

[Laranna]

Hey Mel, have emailed you a cashflow spreadsheet to plug some numbers in, will give you an idea of your out of pocket expenses each week for an investment property.

[Arimeh]

Hey Mel, have emailed you a cashflow spreadsheet to plug some numbers in, will give you an idea of your out of pocket expenses each week for an investment property.

Awesome! Thanks love xx

Misty - thank you SO much for your input in this thread, you have been fantastic. I definitely will go and talk to someone, or talk to my mum's friend, he's an accountant (and also the one who advised my brother) so hopefully he can tell me stuff over the phone and doesn't need to be in person.