Forum Replies Created
RE: Structuring For WRAP and Buy/Hold
It seems that the common consensus is to use a discretionary “family” trust for Buy/Hold strategy and to use a company for the WRAP business. While I do understand the reason behind this i.e. potential capital growth for Buy/Hold and less growth for WRAP; why would’nt you want to use a discretionary trust for the WRAP business as the continuous income steam can be distributed to several beneficiaries. This income stream can be huge if you have a large portfolio of WRAP properties. I would welcome comments from those who already have structured their affairs one way or the other.
Cheers……….johnbgoh
With the 11 second rule; you’re looking at residential property that can return about 10% on investment. Unfortunately, you will probably not find any in all major capital cities. In Sydney for example; you will still be able to find returns of around 7% if you look hard enough. The more exclusive the properties are, the worst the return….some as low as 3.5%. Most properties in the Sydney metropolitan area are currently returning around the 4.5% to 5.5% mark. To get 10% return in the major capital cities…..you would have to look at other then residential property; e.g., commercial and industrial properties……but in this area of property investment you’ll have to forsake consistant capital growth.
Basically; if you are looking for 10% return, you will have to look at properties in the country or possibly the fringes of metropolitan cities.
Congratulation AD. You have done well in such a short time and I am sure you will be going on to a very successful future in property investing. I understand you will be attending the upcoming seminar in November and I sure will like to catch up with you regarding prospecting in Queensland.
Hi Steve,
Thanks for your response. I think you are right about the government wanting to help the first home buyer. If the concept is available to all, it will have a major boost to the property market causing price inflation to the point of bursting. This is because those who already own (or almost own) their property would want to upgrade. They would want to take advantage by moving to a more expensive suburb for not much more additional cost.
On the other hand if it is available to FHO (probably capped at say $250,000) only, we are then going to see a lot of activity in the lower end of the market; which would have a degree of impact on the WRAP market. Frankly, I can’t see why banks would want to get involve in owning properties with low growth potential.
I guess we will just have to wait and see what will happen.
