Forum Replies Created
Thanks Will, I appreciate your feedback.
Unfortunately (or fortunately depending on your viewpoint!) my proposed house is on the Isle of Capri… still hopeful it will be a viable proposition. As I said I want to purchase with a view to it being my PPOR down the track, so this is my motivation (and the ability to service the loan in the meantime) is more a driving factor.
I have my own travel business so will be marketing it aggressively – Do you own a holiday rental yourself?
Kind regards
Robyndna4 wrote:thank for the reply.I dont think it is in direct flight path of the airport. Went there in the morning arround 10ish , it is not that noisy.
Spoken with the developer today, doesnt seems convincing about the building . Has anyone heard about JOHN ELIAS as the builder / developer? The dude told me that the developer had been in the industry for nearly 30yrs and he mentioned couple of the development I havent heard in auburn / homebush.
Two reasons why you didn't notice aircraft noise:
1. The building you are looking at is close to the North-South runway. Planes may have been taking off to the south that morning.
2. The East-West runway passes over between Mascot and Botany. This runway is temporarily closed for 12-18months with work in progress – so less noise in the area than usual.Hope this helps!
eddiec wrote:Terryw wrote:Trusts can negative gear – losses from an investment property can be offset by other trust income, but you cannot offset personal income. This shouldn't be a problem with being self employed.I would urge you not to buy in the same entity as your business. If you do, then you will be exposing the house to creditors if your business fails. Set up a new trust – there is no stamp duty on trusts in QLD so it will be pretty cheap. Your business can then distribute income to the new trust to offset any losses.
I agree with Terry. I certainly would try not to put the property into your existing trading trust (subject to what I'm going to say further below), ie, I would set up a new trust to own the property. Given the non-arm's length relationship of the trusts, however, you will need to ensure that the lease must be at market value rent (ie, yes, the trading trust can lease the property off the new trust). Otherwise, the tax man wouldn't be very happy. If there is still a net loss in the new trust, you will need to see if you could put income into the trust to soak up the negative gearing loss.
This might sound contradictory but if the business in your existing trust is very low risk and the trust carries on a "personal services income business" or a non-personal service business, it might be more beneficial to buy the property in the existing trust. That way, the negative gearing loss will directly reduce your business profit in the trading trust. Your accountant should be able to give you more guidance on this.
The finance side shouldn't be too different or difficult. The only thing the bank is interested in is security and your ability to make repayments. Using the trust could possibly include your personal guarantee but that's essentially the same position as owning the property in your own name. There will be one more piece of paper to sign but not too much more expensive (if at all).
Let me know if you need an accountant specialised in property in Brisbane.
Eddie
[email protected]Thank you for both your advice and your time in responding Eddie. Any referals would be welcome – just need to put the next foot forward in the right place!
Thank you
RobynTerryw wrote:Trusts can negative gear – losses from an investment property can be offset by other trust income, but you cannot offset personal income. This shouldn't be a problem with being self employed.I would urge you not to buy in the same entity as your business. If you do, then you will be exposing the house to creditors if your business fails. Set up a new trust – there is no stamp duty on trusts in QLD so it will be pretty cheap. Your business can then distribute income to the new trust to offset any losses.
Thank you Terry – I think I need a really savvy property accountant – mine has the smarts but she's not a property specialist. I need to get as much leverage out of my situation as possible – can you recommend anybody please? I'm in negotiations on the house at the moment so time is of the essence!
Qlds007 wrote:If you like the property and it is your PPOR then there is no CGT if you sell it now or within the next 6 years so why not retain it borrow against it and purchase the new surfers paradise unit.Guess only issue is if their is little loan against the property and it will mean that the interest on your new house will not be tax deductible then you may be better off to look at selling the Unt into a Trust with you as the Trustee . Borrow 100% of the purchase price and use these funds to purchase your new owner occupied property.
Hi Richard, can you (or anybody else!) advise me?
I operate my business under a trust. After reading these forums I recently asked my accountant whether I should buy an IP in the name of the trust. He advised me 'never'… my situation… PPOR Sydney value $650k, owe $185k (of which $30k is allocated for business development)… IP New Farm value $590k, owe $336, rent $450/week… I need to refinance my IP next month and am reviewing everything. I'd like to maximise my situation – can I use my trust to an advantage here?JONCHU wrote:This is what I would do, I would keep the lot, wont sell anything, get a line of credit against PPOR, enough to use for 20% deposit + costs for the new property, negotiate well, double check that the numbers stack up nicely and lock another property into my portfolio. Not sure how creative this is, however it works.
Happy Investing
Thank you for taking the time to reply Jon. I really would like to build on what I have already. I'll look at the figures again however servicability might be a problem. Being half-way through year 2 of my own business means that my earnings aren't up to where they were when I bought the last IP – only temporary but the loan matures next month so I have to do something!
Yes Steve, the loan structure is my problem now since I might be turning my PPR into an IP, not my original intention, at least not at this stage anyway. Not a good idea to have 80% loan on my new PPR but can’t see any way around it as I’m not prepared to sell either of my current properties now.
Thank you again for your assistance.Thank you for your advice Steven. Re interest rates quoted, they are both with St George (Portfolio @.5% discount for home loan; Std Variable @.25% discount for investment property) If I purchase a PPR on the Gold Coast my total borrowings are likely to rise to over $1m, so I will be shopping around for the best deal! Thank you again!
