For years we diligently paid off our mortgage on our home using it as our main asset. Two years after paying our mortgage off our circumstances have changed and we had to relocate two hours north. We have now been in a rental for 5 months and our mortgage free home is on the market. We have been unable to sell our home regardless of a significantly lower price point than what we purchased the house for 8 years ago. The WA housing market is widely said to be the worst it has been for 7-8 years so we are facing a rather large loss to sell the house. We are now facing the scenario where we may have to rent the house out which is not something we wanted to do. I wanted to sell so I could move forward and get our equity out of the house. I can not buy another home unless I sell our home. I do not know much about investment properties and I thought if I could somehow get another mortgage on the house and turn it into our investment property it would make a good investment. My husband however says that we can’t do this because our house is mortgage free. I don’t know why this is the case and I am quite confused. If we rent the house out as it is we have all our equity tied up and will have to pay tax on the rent we receive and we won’t be able to buy another house as all our equity is in the house. As I understand it now even if we managed to buy another house with a very large mortgage we could not claim any tax offsets because it would be our primary residence rather than a investment property so we would be stuck with an extremely large mortgage and rental income we still have to pay tax on for our first home. This all seems confusing and unfair and I am not sure who to talk to or what to do. We approached a property manager and it looks like after all the costs i.e. fees and insurance we will receive less in the hand than we currently pay in rent. Then we will still need to pay tax on the rental income we get. I feel a bit stuck and would appreciate advise or ideas on what we can do. I don’t really know where to start. Do you know of an honest and knowledgable finical adviser in Perth or even some legitimate articles I can read to start understanding investment law? I hope my husband is wrong and somehow we can strip the equity out of the house by getting a mortgage on it and turning it into our investment property so we can buy another house to live in? Thanks.