That sounds about right. Just don't use the redraw on loan 1.

Since your current home is going to be an investment you could borrow from Loan 2 now for paying all associated costs. Later on when you do rent it the interest should be deductible as you have incurred the interest in money borrowed for the property that is being rented..

makes you want to go and work overseas!

Well, its still difficult to decide because:
– If you use a trust any losses cannot offset your personal incomes. If you add up depreciation expenses, travel expenses then there could be a large loss. maybe $10,000 pa. If in your personal name then you could tax maybe $3,000 in tax. Not so in a trust, unless you are self employed maybe.

– You may have to pay more land tax in Vic if you hold in a trust. I am not sure of the current rules down there.

On the positives, if you have kids, each kid can get approx $3,300 pa in unearned income each year and not pay tax. So if the parents were both working and the property earned $6,000 after expenses then no tax may be payable. If it was owned in personal names then maybe $2500 in tax would have been payable.

But if you don't have kids and are both working and all your near family are working then you may have no one to distribute to so would pay tax just as if you owned it in your own names – or maybe you could cap the tax at 30% by distributing to a company.

Long term trusts will be great, but it can be painful in the early years, especially with the losses and land tax.

Its not that easy. You will need to have an interest in the property to register a caveat. eg you may have helped with the improvements, spousal relationship, provided the deposit etc.

A debt is usually not sufficient grounds.

Good point Jack. And some landlords insurance policies only apply if the property is rented through an agent.

You should also just approach the Australia banks in the country where you are working. eg NAB in Tokyo etc.

Do you really need landlords insurance? Is your mum likely to trust the place or run off without paying the rent?

You don't really need a contract in written form, oral should be fine. But oral contracts on property are unenforceable. I don't think the ATO is concerned with this however, as long you can establish it is market rates.

Not really.

Trustmagic.com is a book of trusts for the average property investor.

There is a lot to it. Actually a trust can be set up in mins very simply but  setting one up in an effective way requires careful planning.

You need to consider many issues such as:
– who will be trustee or who will be director of trustee company?
– should you have a company or person as director?
– should you name beneficaries? and if so the lending consequences.
– Who should be appointor
– planning for the death/bankrupcty etc of appointor.
– asset protection issues
– income tax issues
– CGT issues
– Estate planning issues
– Borrowing issues
– duties of trustees
– rights of beneficiaries etcetc

There is a lot to it. Much more than the average accountant will realise or explain to you.

What about getting a second job, even temporarily?