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I am with CBA with corporate trustee. Rate = same as my personal discounted rate. Might depend on the venture you are trying to fund, ie developments etc ‘may’ fall into business lending which will have a different rate.
It was challenging to get it all set up, but I went through a broker so wasn’t really my challenge, I just heard all the stories along the way.
Westpac didn’t want to play ball at the time (some 18mths ago)
Regards-Eamon
Thanks, can you also find out how much additional work he has to perform once it is there (ie what the company is not doing)
Thanks – Eamon
Have a chat with your accountant, but you may find that sub a thing could be treated as a asset as it is essentially a future income tax benefit, ie depending on how you accounted for the car some of the interest may be claimable as a deduction against your tax.
Too many variables to give a categoric answer so best to confirm with your accoutant with your specific scenario.
Cheers – EKG
Hi all,
This has been a great thread. The only query I have and would like to understand relating to Nathan’s post is, when you go and draw back on the equity and take your original capital back, mathematically the property is no longer a positive Cashflow property, ie income = 15,000 (300×50 weeks) and just finance cost is 15,120 (240,000 x 0.9= 216,000 x 7% 15,120).
Even though you have your capital back and it is effectively no money down, how do you now fund the negative Cashflow position?
Thanks and really look forward to the response.
Thanks – Eamon
I personally use myob business basics for my private finances (potentially overkill) and my trust with corporate trustee. I have not gone too deep into the standard reports and prefer to dump the trial balance to a spreadsheet/pivot table style management reporting tool I created when I was working for a company that didn’t have very advanced reporting. It really comes down to how detailed you set up your chart of accounts that allows you to break up your management reports or for taxation schedules.
I would be Interested to hear what others use as I labored over which one to get last year. It really came down to what I felt was more popular (ie possibility of dumping data to the accountant) and what you are more comfortable with. All the majors have a free trial so take them for a test drive with their example company. Consider how many transactions you would need to record and how you would feel recording that many transactions in the program you are trying.
Good luck, the more effort you put into setting this stuff up it will make it easier to use in the long run (ie not having to constantly come up with work arounds).
Cheers – Eamon
Thanks Richard,
I have set up a standard interest only loan in the name of the corporate trustee secured against one of my other properties (in my own name) effectively accessing the equity built up in that property. I have been stung with a negligible "vetting fee" from CBA to review my off the shelf deeds, a bit annoying but I am getting the same discount rate as all of my borrowings.
Anything I buy will effectively be 100% LVR on this basis, but was just working out whether I should use a lot or a little of these funds to pay for the deposit & holding costs so as to show a theoretical positive cash flow from the new property when looking on a standalone basis.
I estimate within the next 18mths I will be able to pay off my PPOR.
I know a lot of people say oh you should only have positive cashflow in a trust, but I have a vision for my future and my kids & beyond and figure somebody needs to start somewhere…
To quote an old commercial – it wont happen overnight, but it will happen.
Thanks,
Eamon
Thanks for your comments – it has certainly added some food for thought.
Cheers – EKG
