Slow down.Just because you have found a cashflow positive property doesn't mean it is a good deal.What do you need to know? You shouldn't be signing any contracts before talking to a solicitor (and not an annonymous caller). If you don't have a trust set up before you sign then you will be charged double stamp duty in WA if you sign and later put…[Read more]

I personally would use a LOC for the deposits, and then only pay the interest on this each month.And then an IO loan for the remainder, secured only on hte investment property. Use a 100% offset account on this for all wages and rents.PI is ok if you have no nondeductible debt. But, you will be paying down the loans. This shoudn't save you any…[Read more]

Sounds like he may have suggested a LOC for the deposit and and another main loan with the offset?But, if he suggested you borrow and place money into an offset then this is dangerous. You would likely lose deductibility of the interest.If you do use a LOC for the deposit you should never deposit wages etc into this account or you would end up…[Read more]

If something happens the bank will come after the security property first. The mortgage allows them to do this.If that is not enough to satisfy the debt then they would come after other property, but much later.Was the broker also suggesting you place your wage into the LOC each week to reduce the interest?

If you have no personal debt, a discretionary trust may work well. Expecially if you intend to pay the loan down. You need to consider this carefully.2 Commnets on using the LOC to purchase outright.1. If in the unlikely event that you default on the loan, would you prefer the bank take the investment property or your house?2. Using a LOC like…[Read more]

Shape wrote:
Also side note- Most of Nathan's purchases are under his personal name. Personal choice. Terry has already listed the benefits of a trust…and no it does not mean you can borrow more… Regards Michael

Hi Michael,If you are talking about Nathan Birch, then I asked him the question on somersolf forum, and think he replied that…[Read more]

Bob,If you have no non deductible debt then it would be ok to use PI loans for property – especially if this is what you feel comfortable with.But, by using IO loans you will be paying less per month in repayments which may mean that you could afford more properties.Also by paying down a loan you are tying up your cash. This would be available by…[Read more]

Many reasons to use multiple trusts: – off the top of my head1. Asset protection – not keeping all your eggs in the one basket.2. Succession – easier to split up assets between family members when you want to. Imagine if you had 2 kids and one big trust.3. Life – a trust has a life of 80 years, so if 5 years has passed, then you can form a new…[Read more]

scha9799 wrote:
I heard people using multiple trust to purchase the properties, and banks doesn't required you to show if you are the guarantor for other trust. hence you can get the loan easier if somone run mulitple trust.  ie. If you are the guarantor for Trust A, and you also are the guarantor for Trust B. You are buying the property in…[Read more]

You may have heard something about changes to taxation of trusts, but this is just to clarrify a  few aspects with nothing in the pipeline that is adverse – that I know of.Another reason is the flexibility in passing on control in your life time and after you are dead. If you did have a child and wanted them to take over, you would just hand…[Read more]

Using trusts won't help you own any more properties and it could all be done in your personal name – but I think that would not be a good idea for a number of reasons.

Ian,This may not be prudent. All the trust's assets would be tied up in the one property and there would be no diversification so it could be argued the trustee is not investing responsibilily. So, make sure you get some advice regarding this – it may be possible considering the future contributions expected from members.

The law says that interest in deductible if the funds borrowed are used for investment purposes. The ATO has also confirmed that interest on interest would be deductible where the original borrowings is for investment purposes. But they have said in TD 2011/D8 that they will disallow the deduction on the capitalised interest if the dominant…[Read more]

But, there may still be ways to do what you want to do, so don't give up. It may also be wise to apply for a private ruling..

Mayuran wrote:

Terryw wrote:

Mayuran wrote:
I also have similar question , I have a PPOR & IP , can i pay all the rent i receive to the PPOR , and take out another LOC and pay for the IP loan ? will this be allowed for tax purpose?

Again, would depend on the situation and purpose. Why would you want to structure it that way?

So that i can…[Read more]

Mayuran wrote:
I also have similar question , I have a PPOR & IP , can i pay all the rent i receive to the PPOR , and take out another LOC and pay for the IP loan ? will this be allowed for tax purpose?

Again, would depend on the situation and purpose. Why would you want to structure it that way?

Depends on many factors such as the reason for doing this.

Don't forget repairs as these can be significant in some properties. Actually new propertes can have high costing repairs too.

I beleive you can count the whole 6 years exempt – as long as you can meet the other conditions.

MrsC wrote:
This may be a strange question but im wondering if this is the norm. I recently refinanced to ANZ and after settlement i expected paperwork showing the breakdown for each payout. Similar to what Ive had before when purchasing an investment. I get details of disbursements so i can actually see what the costs were.ANZ have just sent me…[Read more]