I have been looking at property investing as a method of cash flow and have read Steves book. As I am currently employed, are there any advantages of registering a business for this venture? I have little cash and even smaller equity at the moment and was thinking that a business may provide personal asset protection while I learn the ropes.
hi colin
no a business for most people is NOT the best way to go. Companies are expensive to set up and administer. They are taxed at 30% even if your able to get your own tax down to 20%. if you sell you don’t get the benifit of the 50% exeption on CGT tax as individuals do, if you hold the asset for 12 months. And finally the banks will ask for a personal gaurantee for any loan to a company anyway so you can’t protect yourself that way.
Butlook into a family trust as the best vehicle to buy cash positive investment properties.
regards westanWe have just been thru the consultation process with our accountant and she has advised us to set up a family trust if we get into positively geared property.
But only because of our current 5 year strategy. Seek professional advice as this can vary with circumstance and intent.
Professional advice can cost you a little and save you a lot. Doing it yourself can cost you a lot and save you little as we recently found out.
Good luck
Papajoe
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