Hi everyone,
I am very keen on a property Im busting to buy.
I will go threw all the recommended advice by Steve, eg. due dilligence, investment detective etc. But I would greatly appreciate some advice on structuring.
I have my 1st appointment with a highly recommended accountant/financial advicer in early Oct. (earliest appointment avail)to set up my structure (Im reading Wealth Creation) but I really dont want to miss out on this deal.
I know there will be others and I dont want to rush anything either but
-do I have any other options on buying this property to me before setting up my structure?
This property has GST included ontop of the price so should I wait, so I can claim GST back?
Wealth Creation says be careful when buying property before setting up my structure, but also says I can buy in my own name if I cant wait.
Maybe I could buy it in my own name and when I set up the company and trust, can the company buy it off me?
Will that be double stamp duty?
What other considerations should I be thinking about?
Does anyone have any better ideas?
Or if you think I should be patient and set up my structure first please dont hesitate to say so.
Thankyou all for your replys I am new at this and really appreciate this opportunity.
Kind Regards
PaulaPaula
Maybe youre complicating things for yourself??? It must be a very BIG deal that you need to be worrying about structures etc.etc.etc…..Its good that you are treading carefully, but I doubt that you need to wait till October before buying a property. My first port of call would be a good mortgage broker (talk to friends, I believe there are some good ones on these forums also).
If were talking about a basic residential property, and youre really `busting’ to buy, buy it. I don’t think you need to really concern yourself with trusts etc. unless you have a large portfolio.
Eric
I would agree with the last post in regards to mortgage brokers.
They really know the options, but would ask “what makes a good mortgage broker”?
For us, the service we received was excellent during the set up and purchase, the goodies hamper after a nice touch, but then not so much!
There were questions which only our bank seemed to be able to answer and how quickly do people expect to hear back from questions to a broker?
How long does the aftersales help last?Is it bad to suggest that usually your current bank can help you (and is sometimes your best option)? and why would you choose a mortgage broker over your current bank who you can ask directly when questions arise.
I understand how busy banks can be and how limiting one bank can be in relation to larger numbers of property investment.
How good are brokers in early stages of investment?
Certainly they are great initially to give options and pose questions but……. ?Originally posted by neo25x5:If were talking about a basic residential property, and youre really `busting’ to buy, buy it. I don’t think you need to really concern yourself with trusts etc. unless you have a large portfolio.
Eric
There is no GST on a basic residential IP.
I disagree strongly with the rest of this post. Without proper structuring you could make a bigger hole for yourself.CATA
Asset Protection Specialist
[email protected]Hi guys,
Thankyou for your responses,
I’m not sure if I was clear on that even though this will be my 1st property, it will be the beginning of my empire.
So I wonder if this means I should be thinking of the Structure first. I understand it wouldnt make much difference if it was going to be the only property I buy.
I read today in Wealth Creation about shelf companies and trusts. Has anyone had any experience with these and will they be faster to set up than 5th October (my appointment with my accountant)
Im very grateful of your advise
Kind Regards
PaulaPaula
I’d say Cata could give you further info as can others on the Forum, there are some interesting posts on this subject..
REDWING
“Money is a currency, like electricity and it requires momentum to make it Effective”
Count The Currency With This Online Positive Cashflow CalculatorCata, even though you have a vested interest in the subject of the topic, I am happy to debate my point and stick by my original post.
I’m not saying that one should not consider it, but it seems to me that Mukta is in some dilemma about which way to go. I am reasonably certain that alot of us out there in the big wide world of property investment retain ownership under our own names as it is the quickest and most cost effective. I highly doubt that for someone with a couple of properties would need to deliberate about what structure they need to go with. Its the same when someone starts a small business. In most cases it is undertaken as a sole-trader situation. Once the business grows (and is starting to make money etc.) then incorporating is probably the next step.
I just felt that delaying a decision to buy a property (particular when Mukta is `busting’ to do it) because she couldn’t see a professional about structure till October is nonsense!
neo25x5
Yes I have a vested interest in this subject but I do not waste peoples money on things they do not need.
As Mukta has pointed out, this is the start of her empire. Therefor structures should be taken seriously. I agree that waiting until october is nonsense and I know that the accountant will probably tell Mukta to use a Pty Ltd company and trust. This should not take that long( times vary depending on state, due to stamp duty). I do not see it taking any longer than 4-6 weeks tops.
Which structure to use will depend on the individual, which is why I ask many questions to get a clear understanding which way someone is going. Business depends on the type of business and type of risk, and assets held(if any).
Also everyones risk tolerence is different. This is something else to take into account. Some people do not want to loose everything they own and have worker hard to get.
Everyone is different.
CATA
Asset Protection Specialist
[email protected]Hi Paula
I appreciate that this will be the start of your empire, but even so, my advice would be to go ahead and buy this property in your own name. If the opportunity is there now, take it.message for Cata,
I appreciate you advice as everyone else’s too,
I am swaying towards waiting to set up my structure mainly due to the GST i wont be able to claim back.
I am alittle confused with your reply though,
what your saying in your first message made sense to me, but in your next message you say waiting is nonense?
Could you please tell me more directly, Im sorry for my simplistic way of thinking, should I buy this property in my own name and start my empire once I have my structure in place?
If I bought it under my Structure, which will be a company as trustee for my trust, when would I be able to claim GST? Is it only when I sell the property? Or next financial year? It would have a 7 year + 7 year option on the lease so I think if I can claim the GST only when I sell then this probably wont be for some time.
THANKYOU TO EVERYONES RESPONSES YOU ALL ARE WONDERFUL.
Kind Regards PaulaPaula
Paula
I basically agree with CATA but don’t think that some of your basic questions have been answered. Firstly, if this is residential property there is no GST to claim back, regardless of which structure you use.
Secondly, I can’t believe you have to wait until October for an appointment. Find another adviser!! I can give you the name of a couple of very good ones.
Thirdly, I support CATA’s advice about buying in structures esp. if you are planning a decent real estate portfolio. Not only that but in our litigious society today a structure will protect your assets.
Fourthly, please make sure you see a good advisor, one who specialises in structures and invests in property themselves. Most accountants say they know and set up trusts with co. trustees only to find that they trust they used doesn’t give any consideration to land tax (which from my experience is usually forgotten about in most transactions.) You’ll also need to know your exit strategy BEFORE you buy because it will hve an impact on what structure you use. By exit strategy I mean will you hold or sell – and when.
Hope this helps. Good luck
Megan
Originally posted by Mukta:I am alittle confused with your reply though,
what your saying in your first message made sense to me, but in your next message you say waiting is nonense?Paula
Sorry for the misunderstanding. Waiting until october to talk to someone is nonsence. I would find someone who wants my business and can set structures in place ASAP.
Is this a residential IP or commercial IP?
Gafama has some great points.
If you want to talk just E-mail me.CATA
Asset Protection Specialist
[email protected]
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