Bloody hell Steve, are you the author of that booklet? The author appears to be a mortgage broker with no legal qualifications. There are some good points in there, but many errors, especially about the finance and asset protection side of things.

Why would a mortgage broker write about a complex legal arrangement such as trusts?

Why do you want to transfer the property to a trust?

Why a financial planner? This doesn’t involve financial products so licensing needed.

The only way to retire on negative geared propertied would be to either sell one, borrow against one, or wait till the positive cash flow is enough. Or a combo

extending loan terms to 30 years if possible can help
Changing from IO to PI can also help
Other than this it is maximising income.

It will depend on the terms he has agreed to with the agent. Most of these agreements would state that where the agent introduces a buy the agent will be entitled to a commission even if the purchase/sale agreement is entered into after the lapsing of the agent’s appointment.

It won’t be easy for them to get finance if they are borrowing the deposit, but they would need at least 20% to avoid having LMI involved with their stricter policies.

Is the company an incorporated legal practice?

Have you considered ways to reduce CGT and stamp duty on a member wanting to take up ownership of a property?

Hi Luke

That sure is cheap rent for a property worth so much. It must be under 2% yield.
That is something well worth taking advantage of, but you could still utilise the main residence exemption on another property.

I have done rentvesting in the past, but generally don’t recommend it.

Although you will be saving cash at the moment over time rents rise whereas those paying off of home loan would find the monthly repayments generally remain the same over 30 years. Use of an offset account and paying extra can knock this 30 years down to 10. It might actually work out cheaper in repayments about the 5 year mark – that is with rent rises the rents paid would exceed the repayments on a home loan at this point.

Once the main residence is paid off it can help serviceability as you are not paying anything for your living quarters – for a serviceability point of view.

Interest on a main residence is generally at a lower rate than an investment property. Careful planning can allow you to get main residence rates on money borrowed from investment properties.

Land tax is another issue – by not living in one of your properties it may be subject to land tax.

The biggie is CGT though. Not having a main residence CGT exemption is a huge disadvantage.

However, the best strategy is to rentvest temporarily by using a few strategies together.
Find the dream home.
Move into it, establish it as the main residence.
Move our and rent the home out.
Claim all associated costs and negative gear it.
Rent where somewhere to live for up to 6 years.
Keep saving in the offset account attached to the loan on the main residence

Once you think the main residence will have a positive taxable income then you move back in.
Pay down the loan, redraw to invest at owner occupied rates.
Keep paying down the non0-deductible loan splits

Advantage
– full CGT exemption
– Full land tax exemption
– owner occupied rates on at least part of your investment loans
– non-deductible debt being quickly paid off
– servicing improves
– taxable income lower as not paying tax on rental income

Get some proper advice because you will not be able to claim depreciation on fixtures and fittings unless the property is new. As you will be living in it the property will not be new when you rent it out. Possibly $18k less deductions as a result.