CATA, your right! If the trust had a loan over your individual property, that would mean you owed the trust money. So if you were sued and someone bankrupted you, securred creditors (your trust) would be paid first.

I think I had it the otherway around for some reason.

Terryw
Discover Home Loans
North Sydney
Terry@discoverhomeloans.com.au

It all boils down to keeping as much money in the account (loan or offset) as quick as as long as possible. This reduces the daily balance and hence interest.

My tune regarding LOCs hasn’t changed at all. I still like them!

Terryw
Discover Home Loans
North Sydney
Terry@discoverhomeloans.com.au

Just out of interest, what would a new pump be worth?

Terryw
Discover Home Loans
North Sydney
Terry@discoverhomeloans.com.au

Originally posted by JenD:
Hi all,

How can you contact the vendor directly when you are seeing the property though an agent – will the agent give you the vendor’s details directly- i always thought they couldn’t give the vendors details by law until a contract was signed?

Still Clueless!!
Jen

Jen

Just ask for a copy of the contract. This will…[Read more]

It might be better to wait until the tenants are out before trying to sell. Tenants can be uncooperative (sometimes), not letting agents in, and not keeping the place tidy etc.

Also if you sign them up for another 6 month lease, what would happen if an owner occupier wants to buy it? They would have to wait 6 months before moving in. This could…[Read more]

I was just flicking through a contract book (Essential Contract Law by Monahan) and it seems that if a contract is in writing, then it is assuming it is wholly in writing, and any party seeking to rebutt this has to prove that the contract was not wholly in writing.(p. 45). The authority for this is State Rail Authority of NSW v Heath Outdoor Pty…[Read more]

That reminds me (for some reason) of an old Chevy Chase movie (ie a comedy). Chevy went to look at a house for sale and as he was shown through the place the vendor kept on saying they were taking the kitchen, taking the poo etc and then laughing. Of course, Chevy thought they were joking but when he arrived to take possession of his new house it…[Read more]

There are various share products available where you can borrow 100% with the ability to prepay interest. Macquarie Bank has a few of these products. If you prepay interest, you may be able to get your taxable income down and thus reduce your capital gains tax payable.

I am not sure about trees, a lot of people have been burned big time by…[Read more]

HAve a look at the adverts in the Australian Property Investor magazine.

Terryw
Discover Home Loans
North Sydney
Terry@discoverhomeloans.com.au

Cata

If a trust mortgages property, that may not necessarily mean a loan agreement.

If it did, and the individual was sued, that loan could possiblly be called it as it would be an asset to the individual. So the trust taking a mortgage over an individual’s property may not work if it was a loan.

I am not sure of the legalities of all this. A…[Read more]

Eleven

I can’t see anything where the ATO doesn’t like hybrid trusts in that TA (or elsewhere). This is about a scheme anyway, so is different to property investment. And I have seen a private ruling from the ATO where they were happy with a hybrid trust owning an investment property. So I think you have nothing to fear, especially if you ask an…[Read more]

I am not a solicitor either, but.

It seems there is a dispute over the interpretation of “plant and equipment”. The contract was with the vendor/purchaser, not the REA, so any communication should have been to you or to your solicitor not the REA. And this communication should have been done before acceptance of the offer (ie exchange?).

So I…[Read more]

Another point. Having your investment loan as a LOC could result in problems with taxation – depending on how it is used.

Every time money is placed in a loan it is considered a repayment. Every withdrawal is considered new borrowings.

So if someone has their salary deposited directly into the loan and then withdraws money for food/living…[Read more]

There is really only one way to pay off a loan quicker. And that is to pay more into the loan as quickly as possible. There are variations on this with offset accounts and LOCs etc, but having a LOC on an investment property would be a disaster taxwise.

An offset account would be a good idea. Especially if they may need access to funds later…[Read more]

Eleven – you welcome. We all love talking trusts!

I think a way to protect assets outside a trust would be for the trust to take a mortgage or 2nd mortgage over property. This could tie up all or most of any equity. As the value increases the mortgages can be increased.

Terryw
Discover Home Loans
North Sydney
Terry@discoverhomeloans.com.au

Hi Cata

From memory, this scheme involved using companies that had accumulated losses and stopped trading. The losses were just sitting there wasting away waiting to be offset by a capital gain. So promoters set up various structures where unrelated companies were made into related companies artificially and gains from the trusts were distributed…[Read more]

Cata

I am no accountant but always thought there was no such thing as a ‘Family Trust’. Trusts that are commonly referred to as family trusts are in fact Discretionary Trusts. Discretioanry trusts maybe be classed by the ATO as family trusts later on if a family trust election needs to be declared (ie there are losses or dividends over $5000…[Read more]

Its not something I would do, but I had a client today that wants a PI loan on his investment property. Some people are just more conservative and more comfortable with paying off debt.

Terryw
Discover Home Loans
North Sydney
Terry@discoverhomeloans.com.au

Yes, me too. If only i purchased that ……..

Terryw
Discover Home Loans
North Sydney
Terry@discoverhomeloans.com.au

If you are looking for a good solicitor in NSW that is familiar with wraps, try Anthony Cordato http://www.businesslawyer.com.au

Terryw
Discover Home Loans
North Sydney
Terry@discoverhomeloans.com.au