sounds like good advice.

I think the cashflow argument runs along the lines of you can't live on capital growth now, where you can live on cashflow sooner.

You will have to advertise or engage an agent. It won't be that easy

benq wrote:
Hi guys,can someone quickly clarify to me whether the entitlement  of the rental income of a tenanted property is that of the seller or buyer , during the 6 week settlement period where only the 10% deposit has been paid and cooling off period has already expired.am i correct to assume that until the property is completely paid in…[Read more]

My understanding is that GST only applies to residential property which is new. So it shouldn't apply to an existing house. It could apply to the new house, depending on your circumstances. I would ask an accountant for a written advice on the matter – and keep detailed records of all payments etc in case you need to claim later. If you need to…[Read more]

You have to be careful in buying something like this. If he goes bankrupt the creditors may start forcing and investigation of recent sales of his assets and if he sells it too cheaply it could cause you problems – may be unlikely, but still possible.

If you have exchanged contracts then you are pretty much locked in – unless the project is delayed and you can escape from the sunset clause.If you think you will have problems getting finance, then it is best to try to onsell the property asap. It is not always easy to find a buyer and you wouldn't want to risk not settling. Stamp duty will still…[Read more]

I think the greatest benefits of a discretionary trust is the flexibility. Once you have purchased assets you cannot cahnge ownership structure without great cost. If you keep on purchasing in your own name you get stuck with the income – it may be small initially, but it will increase over time and is like a tax timb bomb!If you have a trust you…[Read more]

Not really – as long as your money is sitting in the offset – you would be saving the same interest. However, the principle may reduce slight more if you were to make fortnightly payments (because there are 13 fornights in a year).

Janine FMS wrote:
Hi PropertyPaul Here is an exampleI do a loan a homeloan of $500k for Johnny, the loan process takes a minimum of six weeks.  The loan settles after six weeks and then approximately a month after the loan has settled the upfront commission is paid to me.  Within that month the lender sends through (this is based on a 0,5 up…[Read more]

Yes, why not. You can claim all associated costs of maintaining a rental property – travel, loan costs etc too.

Discretionary trusts can help with asset protection and tax minimisation. I agree that they won't help borrowing capacity directly, but they can help indirectly by adding or changing guarantors – something which may not be possible if you borrow in personal names.

Also be aware that simplying paying 12 months worth of repayments in June won't work – you need a special loan with the interest up front, otherwise you will be paying a lump sum off the principle and then be charged interest each month.Some people haven't been aware of this.

No worries

It may be worth the trouble, but not for the interest savings. Imagine if you have a high income this fin year and expect a very low income next year – you could bring your deductions forward and save a heap of tax.Also consider the paying in advance will mean fixing you loan for a year too.

If you hang on to your existing house you will probably have to pay tax on the rent – the rent received would be more than all the outgoings. All of your cash will be tied up in it too, so that will mean you will have a larger loan on your new PPOR and will be paying a lot of interest which isn't tax deductible.If you sell you will end up paying…[Read more]

yes, true. Usually around 0.1% though.

Company tax rates to reduce to 29% and then 28%.Small business write off assets of up to $5000.Nothing much else applies to property investors.

for serviceability purposes guaranteeing a loan is the same as taking a loan in your personal name. So if you cannot qualify for a loan in your own name you won't qualify by using a trust.If you want to know the legal aspects of a trust then talk to a lawyer, tax aspects then to your tax advisor.

House Call wrote:

kong71286 wrote:
From my understanding you have a 'company' that acts as trustee on behalf of your 'family trust' to purchase a 'property', whereby you act as the 'guarantor' and also lend the company the 20% deposit costs.

Hi I want to gatecrash this thread with my own related question.  In the first entry Kong wrote the…[Read more]