If i could subdivide then I would subdivide and sell off the land and use that money to reinvest in something else that is positive cashflow and would offset your losses on the current property. Or subdivide and sell both and then reinvest

Hey,

Me and my wife earn a combined income of $40,000/year. We have set up a trust and a company and are currently in final negotiations of buying our first property.

I can’t give you legal financial advise, but here is my personal opinion.

You have to look at your investment strategy and whether trusts fit into that. Basically you buy properties in trusts to protect yourself from your own negligence. I buy older properties and thus will always miss one thing or another when it comes to maintenance.

I have set up a company, who acts as the trustee for my trusts. Each individual property I purchase in an individual trust. This offers maximum asset protection. The company costs $212/year to own and doesn’t lodge a tax return (it is a non trading company), the trusts cost $0/year and I do my own tax returns.

Trusts make lending more difficult, as banks prefer you to buy it in your own name (it makes it easier for them to get their money back if the investment goes bad), but it makes you liable.

Buying in a trust is good as if you do something stupid (like run over someone while drink driving) your properties are protected as you don’t “own” them. You own the company that controls them, so if someone sues you they take ownership of the company. You then set up a new company, boot the old company out of the trustee position and reappoint your new company (as far as I am aware). Always see a qualified account though, don’t take my comment as ‘law’.

It is my goal to buy 3 properties this year and be financially free in 5 years. If 5 properties is your goal why not start buy purchasing cheaper properties around the $100k-$200k mark. CashflowInvestor.com.au is a property finder service that finds positive cashflow properties and they have quite a few properties in that price range. They charge a standard monthly subscription fee, but are WAY cheaper than a property broker (who tends to charge $500 upfront and 2% of the purchase price).

Hope this helped

Me and my friend are working on a killer property analysis spreadsheet. It can tell you in 10 seconds whether or not the property is positive cashflow…but it is not available to the public yet….sorry

You can use a positive cashflow property finding service like CashflowInvestor.com.au
It is getting harder and harder to find positive cashflow properties these days, so to have a team of people working to find them for you is a great idea.
I don’t like property brokers as usually there is an upfront fee of at least $500 and then you can to pay them about 2% of top of the purchase price, which on a $400,000 property can be like $8,000. The site above isn’t a broker, its a subscription finder service. Hope some of you will find it useful.