The block is costing you money as it is not income producing. Make sure you check with your accountant on the deductibility of costs such as interest etc.

But selling the land will cost money in fees taxes etc. What about building on it and then selling or keeping?

I generally think renting is a great idea as you may be paying a lot less than you would if you were to be buying the same property – but just make sure you invest this savings or you will be worse off in the long term.

Terryw
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Some have a new trust for each property. It all depends on your risk tolerance i guess. As you get more properties in one structure the risk increases. But have multiple structures will cost more to set up and more to maintain.

Terryw
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Lenders will not accept your valuations, they must order them. So it is best to get a rough idea from agents etc, and then ask your bank for an increase (or separate loan). It is best to have a separate account for the increase, for tax reasons. maybe a LOC, depending on the rate etc. Generally you can access up to 90% of the value, so work out what the place is worth, then estimate 90%, minus your existing loan and that is the extra equity you could get your hands on – if you have enough income etc.

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Dave, you would need equity in an existing property. eg you have a $1,000,000 property with a loan of $500,000. You take it up to 80% LVR by taking out a LOC of $300,000.

You then use this LOC for deposits and all IP costs. Pay only the interest on the LOC, don’t put any extra money in here, but put the spare cash you have (wage, rents etc) into a 100% offset account against your home loan portion- The $500,000 loan in this eg.

Terryw
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I don’t know of anything except buying in different states or maybe different names (eg family members)?

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Wasn’t Westpoint a company which was offering these sorts of things? Collapsed owing millions.

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You would probably want to recoup your money within 12-24 months. Also factor in any increase in value this would add (if any) and any tax savings.

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Guarantees are next to worthless. If it is a company, what happens if it goes into administration? If there are personal guarantees, what happens if the person has no assets or goes bankrupt?

12% pa is also not much, there are managed funds that have average over 20% pa for the past 7 years! Some last year have returned 76%.

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Dave, not sure what you mean about manipulating the government!? There is a lot to learn regarding the taxation of trusts. for example there are many different types of trusts and these are taxed differently. There there are the family trust election rules, the rules preventing the trading of losses (forget what this is called) and the legals aspects, “Trust law deals with the nature of a trust, the obligations and duties of trustees and the nature of a beneficiary’s interest in a trust”, not to mention the standard tax stuff too.

have look at this link, the one i gave above was incorrect:
http://www.atax.unsw.edu.au/

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I have purchased a few properties in my wife’s trust using a POA to sign. I believe in most states the POA has to be registered at the land titles office if you are signing for property related transactions. I think you just sign your name and write “as power of attorney for”.

Terryw
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