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.
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.
Bugger, I always thought if you move out of your house to rent it out, you would need to change the loan to an investment loan and from that point in time you would then be able to claim the interest as a tax deduction as you are no longer an owner/occupier of that property.:
I don't know enough about all the money stuff to give you my opinion, but I think you should do it so you're closer to me!!! ;)
Bahahahaha! Thanks.. LOL:
You don't need to change anything about the loan. You just move out and start claiming a tax deduction - but only on the loan that was used to buy the house itself, if you topped it up or used redraw for any non-house stuff (car, holiday etc) you can't deduct that portion. And its only the interest, not the principal and interest - which might be why you're thinking specific investment loans cos they are usually interest only. Most banks will let you switch over to interest only for a smallish fee.:
We're actually living in what was going to be our investment property (so the loan is interest only) and have our old house rented out (principal and interest), and to make it more confusing when we make our current house an investment too only about 2/3 of the loan is deductable because we split the land in half to build a third house! Very confusing ...
I also hang out on an australian property investment forum that has parents on it as opposed to this parenting forum that has property investors on it - you can get all the good info there. Its Somersoft Property Investment Forums . Capital gains tax is another thing you need to think about with investment properties and selling them down the track. There's heaps of threads on making your house into an investment property over on that other forum.