Michael

Yes, that is my understanding – but I am not an accountant.

But you will be required to pay market rates, and as rents rise, you may end up paying tax on your own rent!

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

Hi again

I have not had any problems in getting loans with a trust. Even ANZ did them at 95% LVR with LMI on top and no extra fees. Even in my work as a mortgage broker, I have never seen a lender that had a problem with trusts – except for certain lenders on their low doc products:
Suncorp, ANZ and ING generall will not lend to companies or…[Read more]

Yes it is legal. I don’t know of any references to discretionary trusts, but there is a tax ruling on renting from unit trusts. TR 2002-18.

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

Lozza

about 30% of my LOs have not continued. That means I got the property back empty – but also got the gains that have come with it as well as the postive cashflow in the meantime. And if you re LO it, you would get another option fee, a higher rent and a higher strike price.

The cashflow on my LOs and Wraps worked out about the…[Read more]

Sebastian

It is not very different to getting a loan in your own name. The trustee(s) have to go guarrantor for the loan and will therefore have to supply all of the same info as if they were applying on their own. The lender will also want a copy of the trust deed, and some charge an extra fee for their legal people to ‘review’ the…[Read more]

They don’t usually give them out. I know of one bank that gives them to the broker, and that is ANZ. Other smaller lenders can also be talked into give you access too.

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

Julian

yes the trustee can hold shares in the company as trustee for the trust. So dividends will then pass to the trust. These can then be distributed to family memeber, but they will have to declare the income.

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

Orion

This is usually the case. Just have a look at your trust deed to confirm.

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

The trouble with partnerships is you will both be responsible for the whole loan. You could split it in two, but both names would need to be on both splits – but at least you could run each account separately.

Even having a company or a trust will not help as both trustees or directors will be required to give guarrantees.

Terryw
Discover Home…[Read more]

Luke, I think you could probably make even more money on LOs then wraps for the following:
-Can have a fluctuating strike price, whereas with wraps the wrappee’s ‘strike price’ is constantly decreasing.
-Tenants are more likely to leave then with a wrap – resulting in you retaining more money as you would not refund any equity
-Less tax problems,…[Read more]

I know various people wrapping in Sydney over the $300K mark. The highest I have seen was a $450,000 property and from what I hear, it is still going well.

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

Trusts really don’t work with wages as the ATO classes this as personal exertion income and even if you use a trust, they will deem the individual to have earned the money themselves and tax them as individuals.

I don’t think their is much you can really do in this situation.

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

I too would think it is better to have 2 separate loans. Makes it more flexible if you want to sell or refinance, can keep them unsecuritized and easier to apportion the interest at tax time.

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

John

You can get around using your home as security (directly anyway) but setting up a redraw facility and taking the deposit from that account and then the rest from the main commercial loan.

I don’t do many commercial loans, but you might find it more difficult getting loans in regional areas, so they may ask for a lower LVR. Try Bankwest and…[Read more]

ArthurK

I like LOs better too. They are also less harder to find finance for, and there are less ownership issues. But with your point a) above, depending how you strucutre you LOs, the tenants will be cashing you out just as fast as wraps.

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

Anibus

on a $250,000 loan at 6.45% over 30 years, IO would save you about $53 per week.

I would say, if you have undeductible debt, then use IO for ivnestments and put the extra off this debt. If not, then it doesn’t really matter that much, but using IO loans means you can afford to service more loans initially.

Terryw
Discover Home…[Read more]

fjficm

Thanks for the info. It must be good to have a lawyer in the family!

I think the above would only apply if the trustee was being sued in relation to his/her role as trustee of the trust. If they were being sued personally, then surely all trust assets would be out of reach.

I have also heard that any transaction doen to defeat creditors…[Read more]

If you have equity or deposits, then you can usually get finance somehow –

I would use a broker and try for standard loans first, then try for low docs, then no docs and then even private lenders as a last resort.

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

Every bank has its problems. But shopping around and splitting your loans between various lenders can stretch your borrowing capacity much further.

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

Yes, I have had one of my applications rejected because of too many CRAA enquiries. (Westpac). But it was approved (x2 more) when I explained them.

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