Structuring property portfolio

Hi Adam

That's the issue – a lot of people say "you should set up a trust" but a lot don't have a clue why.

This often results in new investors spending heaps on setting up complex structures that were not ideal for them.

A good resource is trust magic by Gatherum-Goss.

Cheers

Jamie

Plenty of reasons to use trust structures.

A few extra ones with certain structures

1. Ability to sell to your SMSF without stamp duty – and thereby extra cash from your super

2. ability to transfer units to others without stamp duty

3. ability to sell units to another trust and extract equity with the loan being deductible

4. ability to buy something jointly with your SMSF and gradually transfer units.

Hi TheOoz

Firstly welcome to the forum and I hope you enjoy your time with us.

The boys have given you some good pluses of acquiring properties using a DFT structure so i wont repeat old ground.

What you need to ask yourself is what do i really want from my portfolio and when you state you want to be financial free in 9 years what do you mean by this statement.

I was lucky enough to be able to retire from the workforce at age 40 with property assets in excess of $20M and rental income now of over $600K per annum.

We did the hard yards and paid down all bar $1.1 M of debt which i will pay off within 24 months and therefore other than general costs such as rates, insurance etc have no other expenses with the exception of income tax.

Reason i mention this is when we work with clients trying to turbo charge their portfolio they all want something different from property.

Some see themselves trying their hand at a little bit of property development and we try and source property with such attributes others want the rental income and less of a capital expenditure and want to diversify their risk.

Each person is different and therefore has different requirements.

It is not a matter of one cap fitting all and whilst a DFT might be suitable in certain circumstances it may not suit everyone.

I have a spare copy of Trust Magic which will happily send you.  

Few years out of date but the concept doesnt change.

Cheers

Yours in Finance

Good thing i stumbled upon this post. I am new to this forum and property investing. After attending a one on one strategy planning with ironfish i asked the question of the trust structure because i just finished reading steve mcknight's book. I have been told that i can't claim tax if i purchase a negatively property because the trust does not earn income for me to claim tax on. I ask about the multiple use of the trustees income for finance, and was told that it is because it will be an undisclosed trust which similar to lying to the banks. Don't u just love it when two facts clashes, it sure does add to the things i need to study aside from getting my head around property investing. 

@richard – can i please get a copy of the Trust Magic aswell please? Thanks!

You should learn as much as you can and then speak to a good lawyer who understands trusts. You should also get some tax advice and some borrowing advice.

Hi GOM,

Nope, if you buy under a discretionary trust it would be impossible to transfer to a related SMSF.

But if you were to set it up under a unit trust then it is possible to sell the units to a SMSF down the track. This can be done without stamp duty in some states. It can also be done without breaching the SIS Act or regulations.

Hi Crest don't worry cant afford it with a wife and 3 kids to support lol

Cheers

Yours in Finance