Forum Replies Created
Hi Joe,
I have just finished openning up a trust so I think I can help you a bit.
A couple of good reasons for using a trust are:
1. Tax minimisation
2. Asset protectionIn very very simplified terms, the trust can be equated to a company with you controlling it. The company buys properties (or other assests such as shares) and if (hopefully) your properties make money, you can distribute the income to nominated family members (starting with those on the lowest income and hence tax bracket first).
Also, because the trust owns the properties, if some sues you (eg if you are a doctor etc) then they can’t touch the properties because you don’t own them. This is more help for risk professions.
Another nice little benefit is the tax claims. Of course they have to be reasonable, but can include ‘meetings’ at the local pub where you can claim the cost of the meal and drinks, etc.
As for Hybrid Vs Family, If you intend on buying any negative geared properties hybrid is better otherwise family is stock standard.
They cost approx $2500-$3000 to set up and you need to complete a tax return for trust each year.
Phew. Hope that helps.
Andrew.
Blurb: Please see an accountant for professional advice.
lil man,
If there is one thing I have learnt investing, it is that it takes time to learn and do, so be patient. If you are old enough, without being reckless, find the right property to buy. You’ll learn way more by doing.
I would recommended reading a few books while you save your cash. Two goods ones (not just for property, but more for financial improvement) are ‘Rich Dad, Poor Dad’ by Robert Kiyosaki and ‘The Richest Man in Babylon’ by George Clason. You should be able to borrow both from your local library.
Good luck.
ambskunkPS COCR stands for cash-on-cash return. How much cash you get back from a cash investment.
Thanks GP and Terry,
I had a very quick look at Dale Gatherum-Goss’s website and from the list of contents, those books look like they are exactly what I’m after.
I was thinking originally a company was the way to go, but I’m leaning towards trusts.
Guess I have a bit of reading to do!
Thanks again,
AndrewWell, thanks to cheap international calling cards I gave ME a call this morning (or afternoon depending where you are).
The banks only concern was that I hadn’t been in my current employment for more than six months.
I guess that will give us a few months to save some more pennys.
Thanks for you advice.
Hey,
We’re not sure how how long we will be here most likey 18 months+. I am in a permanent position, but we could hit a snag with my wife who is a locum. This is good because she earns about 30% more than normal, but also bad because the contract lengths are usually 3 – 6 months.
Luckily, there are heaps of locum positions for her, so from our point of view there won’t be a problem. Hopefully, with a reduced LVR the banks won’t see a problem either. We may have to wait a couple of months to save some extra cash to throw at it.
BTW nice work with the application timing. We managed to get a 5.99% 5 year fixed rate about a year ago! [specool]
Thanks.
Thanks Rob,
The bank is Members Equity, which from our dealings so far seems to a little more open than some of the big banks.
We’ll give it a shot.
Cheers.
