Hi everyone, Two of my friends and I have decided to start investing in real estate. As we don't want to invest in real estate as private persons, we would like to start a company and buy properties through this company. As we have no experience in this field could anyone please give us some tips and advice on what type of company is best for investing in property in terms of getting finance, getting best tax advantages and so on.
Firstly welcome to the forum and I hope you enjoy your time with us.
Before you start out you need to decide where you want to go and why.
Are you looking to buy and sell property or buy, renovate add value and rent them out.
Once you have established this you can start to formulate a structure and entity for moving forward.
There are reasons why you would hold long term assets in a Company structure however if you are buying long term and the Pty Ltd Company is a Corporate Trustee then this would be a different matter.
From the entity you can then look at how you finance these projects and stage will start to fall into place.
Once you have the formula in place and as long as you do your due diligence on each property then the rest will follow.
Dont be afraid to ask lots of questions along the way.
Richard Taylor | Australia's leading private lender
You will need some good advice as some things to consider – what happens if one of you gets divorce – what happens if 1 goes bankrupt – 1 wants out? (This will happen!). Does the house have to be sold or 1 partner buy out the other? – who is director? – who guarantees the loan? – no 50% CGT with a company – what happens if 1 does more work than the other – more profit, higher 'wage' etc?
You will need some good advice as some things to consider – what happens if one of you gets divorce – what happens if 1 goes bankrupt – 1 wants out? (This will happen!). Does the house have to be sold or 1 partner buy out the other? – who is director? – who guarantees the loan? – no 50% CGT with a company – what happens if 1 does more work than the other – more profit, higher 'wage' etc?
We are going to be mainly buying property for positive income but if the opportunity comes and we can buy something, renovate and sell with profit then we would of course buy too.
Be very careful who you take advice from, seek out a specialist property accountant, and get them to offer advice on the type of entity/s that are appropreiate for your own personal situation.
Dont penny pinch in this area, as it is far easier to get this set up correctly now at the start, rather than try to fix it up down the track once you have bought 10 properties and didnt have it structured correctly to begin with.
If you are seriously considering to jump into the property jungle, be very careful. It can be deadly, if you don't have a right advice. And please only take advice from people who are in the game and are winning.
If you wish I can connect you with some very successful professionals, but only if you are serious. Be aware, it's not a joy-ride, it's your future (and my time). I only want to save you from the heartache!
Pty ltd with a unit trust as the sole shareholder then you issue a unit to each of your investors, buy far the best way i have found of doing it, due to tax breaks. Of course you should check any of this advice with your accountant or financial planner