Forum Replies Created
If only creating wealth was about the interest rate. Sorry it is not that simple. In who's name is the property- is a business structure appropriate?, Does your loan capitalise interest? , does yoor loan have offset account(s)?, what are the land tax consequences of your structures after further purchases, what about depreciation, CGT, and further loan increases for the astute investor????……. When someone has a focus on the interest rate questions have to be asked? I have many investment properties and although a nice rate is good, I cannot become wealthy if my loan capacity is nil due to the cheap arse loan that that cripples my investment moves…….. think structures and strategies……… http://www.birchcorp.com.au
Be careful of the referrals, particularly when you are to drop names – in the planning, broking and accounting industry spotters fees are common – this may not represent quality (I understand this may not be the case above, but I like to look at all angles before posting). Richard (noted above) has done his time on this site, and is a good operator, he has his own business, this represents confidence and ability. GOM is not a skeptic, but it would be a little disappointing if this was not pointed out allowing our new property investor to be guided inappropriately or into the wrong hands – making money starts very early and without sound advice things can stagnate very quickly.
Some say an idiot others say a genius??????
Who pays for the auditing and accounting now of the trusts and I am assuming you guys are ordering a corporate trustee?
????Who will absorb the losses, losses cannot be filtered through a trust????? i.e. means only positive gearing is allowed. I now some very good growth occurs in negative geared properties as well.
Who gets a land tax threshold, I know an individual does?????
Partnerships work, companies work, individuals work, and combinations work…………
Estate planning may be done through testamentary trusts if this is a concern.
Asset protection??? From what / who????? These details we do not know. So to set up costly trusts etc may be a bit pre – mature. Yes, transferring later is expensive. But you may only ever have one investment propertyy like average Australia, so lets not get too carried away….
Look, I would not suggest for a minute that one way is better than the other without taking into consideration your personal circumstances – In your accountants defence he has more information on this matter then on a blogging site. There are a lot of considerations. I am sitting on the fence until I get all the information. http://www.birchcorp.com.auMichael,
I purchased my first property in the same manner as yourself, I bought three properties in my first three years whilst living at home. I retired at 34 off the back of property and a science teacher at Doonside High School. Drop me an email offline at http://www.birchcorp.com.au and I can guide you through my success. Otherwise, all the advice listed above is a perfect start…….
It is all about the strategy,
Terryw, I like that you are thinking, but, Taking money out with the intention of margin loans has a large element of risk : Margin loan interest rate of 8%, not likely and it will only get worse with the years to come….. A drop in the stock market like the GFC – do you sell or sit and wait only to find we have entered a secular bear market like Japan for the last decade or so…… Making money is not about speculation but calculated risk with back- up plans and buffers to secure your wealth….
If you wanted to take money from your investments (equity release), think about simple measures such as release of owners equity – borrowing to pay back owners equity by forming a partnership at general law. This is tax deductible without the added expectation of relying on the stock market and unrealistic franked dividends (for the record unfranked can also be very good depending on your financial circumstances).
Your circumstances will not fit into a text book answer, there are strategies that are created for the individual all the time….. But to sum up, if you have the right tools and advice releasing equity is very possible and done by wealthy businesses, and individuals all the time. Yes it takes plannning and yes positively geared property is excellent but so to is the life when you are living on your equity…… I retired at 34
Leigh BirchThere is no need to air your dirty laundry here…….. Renting out rooms has CGT consequences as well…… I cannot say what to do here but I know a lot of people that will put there hand up for that free rent…..
Leigh Birch
http://www.birchcorp.com.auWayne,
Its generally too difficult to find finance whilst you are out of work.
Use your credit card (if available), then transfer the balance to a nil / low interest credit card until you get a job and back on your feet. Once you find employment you can refinance this debt under your investment property (with LMI – tax deductible if your CC debt is used for the investment property expenses and interest). This will take a little organising but the debt can ultimately become tax deductible with a little planning……. Once you find your feet, take out extra cash from your investments as a buffer for when / if this happens again…… LMI is once again tax deductible as this cash out may be used to capitalise interest etc…..
Leigh Birch
