Dangermouse,
The main purpose of a trust is for asset protection. If you are a business owner or a director of a company and there is any likelihood or risk of being sued personally, a trust should be considered or at least move/have assets in your spouse's name.
Secondary for many is the ability to distribute income if the trust is generating profits and thirdly there can be some estate planning benefits.

Be cautious of professionals advising on products they get paid for. I have seen examples of a separate trust being set up for each individual investment property owned as their accountant said it was the best way to go.

In terms of lending, most lenders are very comfortable with discretionary (or family) trusts, many won't deal with hybrid trust or may restrict the LVR's if they do. The ATO has said they are looking at the use of the hybrid trust so be aware of the implications of that.

Trusts can and do have their place in the owneship structure for multiple property investors. When the costs of holding more properties in personal names becomes expensive or when tax benefits of holding negatively geared properties has been reduced to a marginal tax rate of 15% or lower or you are purchasring positively geared properties, consider using a trust structure then.
I hope this helps.
Greg

Renel,
Specifically to your question, in most cases all an investment loan needs to have is 30 year term, 5 year interest only, either variable or fixed rate (or mix) and internet access. No bells and whistles, no associated credit cards, etc.

For some investors, they may need an offset if they do not have a PPOR.

As Richard said, 2 of the lenders mentioned are available to brokers, you would need to see if they are on the broker lender panel (often an issue for the aggregator credit rep model). CU's tend to target the OO market and often require you set up direct salary debit which may not suit an investor and they tend not to be as competitive in the fixed interest rate area as they do not have the pricing power/credit rating to access cheaper funds. The interest rate will also depend on LVR, dollar amount and property type. Brokers can often negotiate for better pricing deals if the loan is large enough and meets the market that a lender is targeting, you may not be able to get that through these lenders.

As to whether a broker will know is a different issue, like any other profession, there are some excellent and knowledgeable brokers, some who are investors themselves and know what is required. There are also some that just operate as bank agents, using only one or perhaps two lenders and are just paper processors. Most brokers just focus on the owner-occupier market and have little knowledge of what is required for an investor, so do your research and ask the questions.

Other comments made above are valid, do your research first.
Good luck with it.
Greg

Chief,
The property manager I use for my properties is Mitchell Property Management Group, thats all they do and they do it very well.
03 9686 6688.
http://www.mitchellpm.com.au

Good luck, a good property manager is worth gold to an investor.
Greg

Richard,
As a general process, for new clients as owner occupiers I usually charge a fixed engagement fee which is refunded in full on settlement, mainly to sort out the shoppers from the serious clients but also as an indication of professionalism and commitment. For returning clients, I do not charge this. For investors wanting a full strategy mapped out, I charge a fixed fee for the strategy and rebate the up front commission if they use me as a mortgage broker.

A client with a $20k increase, I would generally use the same lender unless there were issues (servicing perhaps) or significant cost differences. Depending on the lender, I may not get paid at all for that.
A client wanting a product switch, depending on what they want/need, again I look at overall cost to them and will generally offer 3 to 5 different lenders as well as their existing lender and they chose.

I think a bit like Terry, what Michael appears to advocate sounds strange to me also. I have trouble understanding from a licencing point of view how you could operate like that, under a credit rep model, very few aggregators will permit off panel lenders and if you have your own licence, the work required to go into investigating other lenders or other broker offerings is daunting.

I expect a BA (is there such an animal?) is still a credit assistance provider and needs to be licenced. It looks as if the term BA came from the US and adopted here.
Looking at both the Vanilla Loans site and Borrower Agents sites, they both seem to be able to spin a story but I am unsure on the sustainability of their models and the accuracy of some of their 'facts' or perhaps assertions.Perhaps there is a way to negotiate with lenders so the customer gets a lower rate in lieu of commissions or that the aggregator is happy not to get their cut or perhaps happy to handle commission refunds to clients monthly.  I can't imagine many clients comfortable paying an upfront fee of $2k in return for deferred commission or even a  lower rate.
Greg

Jenny,
While I am a CA, I do not see much difference as you can get good and poor with either branch of the accounting profession. The CPA tend more to small private practice and the CA tend to be employed more in large companies but  they both have post graduate qualifications.
If you are looking for accounting and tax advice, check who their clients are, what areas do they specialise in, are they property investors themselves and ask some specific questions to see if they know their stuff.

I have been to accountants (so I can refer clients to) and asked – revalue an investment property and refinance a loan, use the additional equity as a deposit for their PPOR – is it new loan deductible? You will be surprised how many do not know basics like that.
Good luck
Greg

Tim,
I did attend Bill's latest boardroom seminar. I have been going to his seminars for some years now, he is an interesting speaker with some good ideas. It appears he has closed down his gold and silver business and the green deals and just concentrating on offering one on one type advice for a cost rather than trying to do a lot of things.
He seems to have moved to purchasing H&L packages that he says he can obtain at discount prices, both land and build and then investors hold for 12 months or so and sell to generate an cash flow return.
It is a big move away from what he has previously advocated, partly due to finance availability and the market itself but what he claims and what he can deliver may be two different things. I had a client attend, was given prices for a H&L at Point Cook (Vic) that they said was good value but the client did independent research and found he could have purchased cheaper in the area from the same developer and builder.
It makes you wonder. By all means do your own research.
Good luck in investing
Greg

Amy,
I f you have already purchased the property and unless you have a nomination clause, it may be too late to put it into the trust without incurring stamp duty again.

Accountants love putting people into trusts, why – because it is more fees and work for them. It is not always in the best interest of the clients. If asset protection is critical, use a trust, if it is not, then why incur the additional costs yet?

My general view is that until your tax benefits are used, I would purchase in individual names. For the median type negatively geared property (as most capital city properties are) then 2 to 4 properties tend to utilise any tax payable and then you would consider using a trust. You have used your personal tax benefits so using a trust will not disadvantage you in the short term and there are longer term benefits, such as potential land tax (depending on state) and income distribution.

I agree with others above that if it is a positively geared property you are purchasing, use a trust.
Good luck

A simply solution would be to have your parents get a loan or line of credit established based on their own property and income and then just lend you the balance of the money you need, which you repay. Why go to a more complex structure?
Alternatively they could go guarantor, either equity or income or both.
Good luck
Greg

Terryw,
I agree, you need to take care in setting this up. The issue should not be whether the interest on the LOC is deductible but you are paying off your home loan sooner. The purpose is still critical.

The initial setting up of this LOC and the amount needs to be in line with what your needs are, so the higher amount the more flexibility you have as long as it is not so high as to limit future borrowings. In the private ruling you mention, it seemed that the linked loans were the issue where to increase the LOC the taxpayer had to reduce the home loan, perhaps keeping the overall facility the same but changing the mix.

The use of an Offset combined with this may have made a difference. Interesting times.
Good luck
Greg

As a PPOR purchase, I would try to minimise the debt and certainly minimise any MI costs.
If it was an investment property, I would do the opposite.

If a 1 bed flat is in a good location, suits your needs and you can borrow < 80% then it should not be an issue obtaining finance, especially for an owner occupier. The real issue on small units <50m2 is when you want to borrow > 80%, the MI's do not like them nor do most lenders either. You can get 80% finance for as small as 38m2 but the lender selection is limited.

For a PPOR, it is about lifestyle. If it suits you, more than likely it will suit similar tenants down the track.Good luck
Greg