Forums / Getting Technical / Finance / Trust funds (I’m new)

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  • Profile photo of nikki1nikki1
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    @nikki1
    Join Date: 2013
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    Hello i currently reside in australia, I'm new to investing, I haven't brought a property yet as I've got a little more saving to go… I've been doing a lot of reading and studying about property investment and I have a question about structuring my future investments, particularly in trust funds.. I am investing on my own and my goal is to build a portfolio of positive cash flow realestates, (starting in NZ) I am wondering is it a good idea to open a trust fund account and can I do it by myself? Will the trust fund give me more borrowing power with other banks? Is it expensive to have a trust fund? ANY advice on this would be greatly appreciated.

    Profile photo of Jacqui MiddletonJacqui Middleton
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    @jacm
    Join Date: 2009
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    Taking a step back, is there a reason why you're thinking of going down the trust route?  Or is it that you've heard about trusts and are trying to figure out if using them is appropriate for you?

    Jacqui Middleton | Middleton Buyers Advocates
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    VIC Buyers' Agents for investors, home buyers & SMSFs.

    Profile photo of jenni_nextplace.com.aujenni_nextplace.com.au
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    @jenni_nextplace.com.au
    Join Date: 2013
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    Best to speak to your accountant in regards to using a trust fund, they have a full picture of your finances and will best be able to advise. There are many different structures you can use.

    Profile photo of nikki1nikki1
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    @nikki1
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    Umm well this is how i interpreted what i was reading, that trusts can give you more borrowing power as the loan will be under the trusts name (or the garantor of the trust) rather then my own name… (And since im building a portfolio by myself i was thinking thats somthing i might need) And yeah, just trying to find out more information about them to determine if this kind of structuring will be a good option for me… I'm also trying to get a clearer picture of what's involved in having a trust…

    Profile photo of Richard TaylorRichard Taylor
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    @qlds007
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    nikki we hear it every day of the week from forum members but hate to say it is simply just not true.

    In the main you will not borrow more by doing it thru a Trust. 

    There is a few things you can do to to enhance your prospects going forward and turbo charge your portfolio but that is not one of them.

    Cheers

    Yours in Finance

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
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    0-40 Properties in a decade with a unencumbered portfolio value in excess of $40M. Ask me for a copy of my API Interview.

    Profile photo of Mick CMick C
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    @shape
    Join Date: 2010
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    Trust won't improve your borrowing capacity. It however provides asset protection and a possible tax efficient method to mange your taxable income( 2 main benefit of a family trust).

    Mick C | Shape Home Loans
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    Profile photo of Jamie MooreJamie Moore
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    nikki1 wrote:
    Umm well this is how i interpreted what i was reading, that trusts can give you more borrowing power as the loan will be under the trusts name (or the garantor of the trust) rather then my own name… (And since im building a portfolio by myself i was thinking thats somthing i might need)

    As others have pointed out – it doesn't help with borrowing capacity.

    Correct loan structuring, lender selection, maintaining minimal consumer debt and the types of properties being purchased play a big part here.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
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    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of TerrywTerryw
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    I agree – trusts don't help you borrow more!

    Terryw | Structuring Lawyers / Loan Structuring Pty Ltd
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    Profile photo of number 8number 8
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    @number-8
    Join Date: 2010
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    As per above, so, so wrong.

    Regards

    http://www.birchcorp.com.au

    Profile photo of nikki1nikki1
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    @nikki1
    Join Date: 2013
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    Ok.. Thanks for all the replies! I will have to do more research 

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