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Fair question, and one which I am still contemplating the answer to. But in summary, while the rental yield might be low, I believe that the property will enjoy fairly strong capital growth, provided I hold it for a reasonable period of time.

Excellent - thank you both Brady and PT_Bear for a thorough and prompt explanation. Just to elaborate, I do not intend to invest merely for tax advantage. Ultimately my aim to make a capital gain, which, on my calculation, will be possible if I make more than 1% capital growth each year on...

Hi all I wish to know what is the most tax effective means of borrowing for a purchase of an IP. My situation is as follows. ? I recently purchased a PPOR valued at $800k. I have a loan of $700k of the purchase price, and $450k parked in an offset account. This means that the net...

jonmardell: I thought that was an option as well, but the broker I spoke to acted as if it were a ludicrous idea. Marty McDonald: awesome effort - I did a similar calculation and arrived at the same conclusion. Rolf: Agree - I don't think the broker has given any real thought to how I...

Hi Jamie I believe that the Loans.com.au "offset / redraw" account (as it is nebulously advertised) is a genuine offset with its own account number that is separate from the loan account.

Hi all Thanks for your responses. My broker has given me the impression that my borrowings are limited by my income, and nothing more. Given that I have $500k cash at hand (upon settlement), I asked whether I could use this as "security" (for the lack of a better word) to get a loan for...

Hi all First let me say, thanks to all of the contributors - this is a seriously helpful forum. Background I am in the process of selling my PPOR (fully paid off) for $500k. I have made an offer to buy a new PPOR for $950k. For the purposes of my question, please assume that...

OK thanks guys, you have given me something to think about.

Thanks Starter and Blue Blue Eyes. If I did as you suggested, would it be advantageous to move to the higher valued property, establish it as my PPOR, and then leave for Dubai? That way, I will enjoy full deductible entitlements (except for the 6 months I am residing in it as my PPOR) and...

Hi all I am seeking opinions on possible investment options. First of all, my circumstances. I own a fully paid off apartment in Melbourne CBD, valued at approximately $500,000. The apartment is my PPOR. I have no other assets, apart from a bit of cash in the bank. In the next 6-12...

Understood - thanks for the advice. Dazz, I was not suggesting that I would blindly accept whatever options the banks presented me with. Nor would I uncritically accept the structures suggested by a mortgage broker (they have biases too). I was more interested in exploring options and...

Many thanks for the input. I particularly like the idea of using the cash in bank as security, although as others have cautioned, I will need to consider the implications carefully. To give you further background, the $400k is a simple estimate based on my income of $100k inc super. I have no...

Hi all On my income, I can borrow approx $400k. I have, or will shortly have, $500k cash in the bank. I wish to purchase a new PPOR for $800k which I intend, after a few years, to convert into an IP. To maximize mortgage deductions, I want to borrow close to the purchase price of the...

Thanks Aaron I will check the City of Melbourne website as recommended.

Thanks Melbournian for your comments. I'm very much a city dweller, I do not own a car, and have not considered congestion issues. You are right for pointing this out as a potential issue as it would of course be relevant to other buyers should I wish to sell down the track. I read the...

Hi all I am contemplating the purchase of an apartment in Eureka Tower, Southbank, as my PPOR (which is currently in the CBD). The apartment I am looking at is on a lower level of the building, and currently enjoys views across the boulevard and into the city. Some of these views are...

Hi all I made the mistake of making significant overpayments into my mortgage account of my PPOR instead of putting these funds into the offset acct. I was, at the time, unaware that the ATO treats redraw facilities differently from offset facilities. I now wish to convert my PPOR into an...