My 1st IP and Needing Advice

Your market? No clue.

I can't see home price reversing track in Melbourne anytime soon - mainly due to strong migration. If the population increases rapidly, there needs to be more places to cope with the demand. From the way Melbourne is handling its transport woes, I can't see how the housing stock can be increased appreciably in the near future. The best opportunity for a bubble was last year when confidence was lowest during the GFC. So how could the bubble occur now when the economy and employment prospects are improving, and people are becoming more confident of making long-term financial commitments?
 
I still blame sleep deprivation for the snap decision..

All good buys are spur of the moment:p
My wife hates me when I go to an auction:D
I asked her one day if we could go and have a look a local auction for repossessed land.
She agreed,it was hot and she stayed near the car with the baby.
I was the only person to bid.
We only went for a look.:D
She bashed me with the umbrella when she found out:mad:
 
Does it mean that you are just earning rents and not reaping benefits of capital gains?

You get (perhaps indirectly) the CG if the trustee decided to sell the property. Obviously the BIG difference with this is that you have no say in the decision / timing to sell (or buy).

For this to be worthwhile, does it mean that the rate of return needs to be higher than the mortgage interest rate plus income tax rate, since I will be using the money that will otherwise be put into the offset account and I need to pay tax on this net rent?

Correct, although you get some depreciation benefits apportioned as well.


Cheers,

The Y-man
 
All good buys are spur of the moment:p
My wife hates me when I go to an auction:D
I asked her one day if we could go and have a look a local auction for repossessed land.
She agreed,it was hot and she stayed near the car with the baby.
I was the only person to bid.
We only went for a look.
She bashed me with the umbrella when she found out:mad:

Haha :D I am lucky that my wife fully supported my decision for this IP purchase. Since you mentioned this, it happens that many of my major life decisions are spurs of the moment, including my marriage and this is the best decision I ever made.:p
 
Doubt there willl be further inputs so will like to close this thread by thanking Y-Man and RumpledElf for their suggestions and the advice to be cautious. Probably, the timing is not right.
 
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