Suzie owns three investment properties in Adelaide. Rather than obtain a separate loan for all three properties, Suzie obtained a loan secured over her own home.

Suzie uses property managers to manage the investment properties on her behalf. The property managers charge an upfront letting fee equal to one week's rent and an ongoing management fee of $850 per annum.

Which of the following statements is TRUE?

Select one:

1 The interest on the loan is not deductible as it is secured over Susan's main residence.

2 The letting fees are not deductible as they are capital in nature and add to the cost base of the properties.

3 The ongoing management fees and letting fees are a deductible expense.

4 All of the above.