Hi,
Our 2 year old owner occupied property is in joint names with about $170,000 equity in it.
For further investments in property should we use our Pty Ltd Company that is already set up, or should we set up a Discretionary Trust ?Also, are Buyer’s Agents like positiverealestate.com.au a good way to source positive cashflow investment property ?
Any comments on the above would be appreciated.
Cheers,
Paul.[cap]Talk to your accountant. I would suggest a trust of somesort.
And watchout, you can’t just setup a LOC and use the money for the trust/company. Loan agreements need to be drawn up so that the interest can be claimed – as they will be different entitites.
Terryw
Discover Home Loans
Mortgage Broker
North Sydney
Click below to email meTerryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Thanks for the info Terryw.
Cheers,
Paul.P.S. Any comments on buyers agents ?
I used them in the past, with good results!
Terryw
Discover Home Loans
Mortgage Broker
North Sydney
Click below to email meTerryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Originally posted by terryw:And watchout, you can’t just setup a LOC and use the money for the trust/company. Loan agreements need to be drawn up so that the interest can be claimed – as they will be different entitites.
If the LOC was set up in their personal names, the action you recommend is good advice.
I would however use the same lender that holds the current first mortgage, to set up a lending facility for the new entity. Yes, it would then be 3rd party security and not an easy join-the-dots type loan exercise, BUT it isn’t impossible to achieve.
If my current lender wouldn’t do it for me then I might go looking for one who would.
If I can set my new loan facility up in this way then I don’t need a loan agreement to (in effect) on-loan the newly borrowed money to the new entity (presumably the new Trust structure).
My borrowing structure has already achieved that outcome for me. And as we all know, it isn’t what secures a loan that makes the interest deductible. It’s the purpose to which the funds are used.
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