And the disadvantages are:

Cost to set up (say, $1500)
ongoing costs (say $1000 p.a.)
more paperwork & reporting
cannot negative gear ie.offset losses against other income
pay land tax regardless with no tax free threshold

Have I missed anything?

Thanks Terry, thanks house call, this is all good advice and I'll investigate the options.  I knew there was a lot more we could be doing.  I'm also thinking that with the equity sitting there and only 50% geared we could purchase some +tive geared IP's to offset the costs on these 2.  Sounds good anyway.

Thanks for the clarification Terry.  I am still unsure overall as to whether or not to set up a trust and purchase IP's through it or purchase them as an individual.  Steve McKnight seems to think the former is by far the better option.  Anyway, I'll crunch some numbers and try to work it out.  Thanks for your input.

Thanks Terry – How do they hinder exactly? 

Thanks Terry for your comments.  Yes, the accountant did mention that.  The bit about existing debt levels affecting the ability to borrow via a trust cam straight out of chapter 9 of Steve McKnight's first book '0-130 properties in 3.5 years' page. 175.  Has anyone out there set up a Trust and discovered they could NOT borrow any more than as an…[Read more]

Hi grimnar – thanks I see what you mean.  A very simple little thing that at least frees up some cash flow.  Hi Trent – yes, I have been wondering about that too.  I have this feeling that we could do things waaaay better than we are.  Eg. We are only geared to just under 50% at present with 600K+ in equity.  I crunched the numbers a bit diff…[Read more]

Hi GrimnarYes the flat would pay itself off with a little left over if we moved out and rented it out.  But the other property is heavily negatively geared.  If we didn't have future plans to live there we would be better off investing elsewhere from a cashflow perspective.When you ask about re-financing the flat to offset the amount paying on t…[Read more]

Hi Scott1. The current values of the properties are from real estate agents in the last 2 months and if anything may be a little on the low side, and the rent is actual/recent estimate from agent.  So figures are all pretty up to date if not inspiring.We bought these properties 8 and 9 years ago for: Flat in cap city – 290,000House in regional – 4…[Read more]