Tenants in Common

Is there any reason why you wouldn't purchase it in a discretionary trust?

Yes it needs to be shown on the Transfer document however as Luke mentioned I would certainly looking to buy the property in Trust if it is positively geared for a number of reasons.

In regards to set up it takes 24 hours to set up a Discretionary Family Trust and would cost circa $850 with you as personal Trustees or another circa $600 as a Corporate Trustee.

There are so many advantedges it is not funny so the fact of waiting a day would for most be neither here nor there.

You will save the costs many times over.

The most important part is however the lending structure especially if you want start to acquire multiple properties.

At that yield i am assuming the property is regionally based to lvr will vary depending on a few factors.

You certainly dont want to be cross collateralising your loans as otherise you will not buying when you want to or when you feel you can afford the next IP but merely when your lender allows you to. If they down value one of your properties, have a change in Credit policy (which at the moment can be weekly with most lenders) or change in serviceability criteria (again which happens all the time and often with every rate reduction) you will be stopped in your tracks and the cost and time of unravelling the securities (if it can be done) will cost you a lot more in the long run.

Yes we all want to jump on the next IP especially one with a good yield but trust me taking time to ensure the loan structure and entity is correct will be well worth it when you buy your 10th or 20th IP.

Cheers

Yours in Finance 

As Terry has mentioned i think you should avoid taking advice from friends like that you seem to have mislead you totally.

I have 5 Family Trusts that own our property portolio of some 40 residential properties and would never buy in our personal names whether it be as Joint Tenants or as Tenants in Common.

In Qld you notate the Transfer Form 1 showing how you wish to hold the property.

Cheers

Yours in Finance

A discretionary trust is probably the way to go. Accountants and lawyers can set them up and you should use an expert because there are so many issues to consider.

Hi,

In answer to one of your original questions, you will generally find the % listed on the property title search once you have purchased the property too – so anyone who did a search on the property would see this also, as it shows the ownership structure in this information.

Cheers

Hey Jimmy you need to email .terry this thread is about a year old  but with what you and I have read info orthe grasp of it is there.If need be could ask terry to either set one up or recommend some one in your area

JS, I have seen many people try this none have succeeded.

Do you realise the effect this would have on an individual's borrowing capacity???

You need to think through the various issues. there are many.

Coordination 10 people is hard. Have you ever tried to organise a group of 4 to eat? what, where etc is not easy. Imagine with 10.

1 will almost certainly lose interest and want to pull out etc. Constant hassles like this. Choosing a property that everyone agrees on will be a nightmare. Except if they are just shareholders and there is one director who decides maybe.

Trusts effect on borrowing capacity would be similar. Each unit holder would be required to provide a personal guarantee as well as the trustee or company directors of teh trustee. Each guarantor would be guaranteeing the whole loan amount. So if you bouhgt a $500,000 property you may 'own' $50,000 of it but you would be guaranteeing $500,000 loan. Each subsequent loan would look at you owing $500,000 but only getting an income of 10% of the rent…