The most common trust structure i normally deal with are:

Mortgage owner— ABC pty ltd as trustee for Chan family trust
Borrower— ABC pty ltd as trustee for Chan family trust
Guarantor

There is a range of combination you can do, some are more complex and some lender will try to avoid them- so work out with your accountant which is best for you; in term of finance – YOU will find a lender that will consider, it just depends on the lender you ask.

Richard would have answered most of your questions; but let me give you a few tip and what to avoid

1. Commercial or residential? – Dont be fooled, some lenders consider this as a commercial deal! but it’s NOT…it should be 100% residental deal..and you should be getting the standard residential rates.
2. Tax – As your aware buying as the trust will give you asset protection and tax advantage. HOWEVER most lenders or some brokers dont know how to structure your trust loan and the most common outcome is the borrowers losing their tax advantage.
3. Trust type? – there are many different type of trust you can set up in Aus, the most common are – Unit, Family, Hybrid and SMSF . Out of this list the one some lenders try to avoid are Hybrid and trust with company trustee, due to the amount of paper work, time and legal issue involved for the same “profit” ….it’s just not worth it to some banks.

One of the banks that i like to deal with in term of trust is Citibank and HSBC- they tend to get it right most of the time.

Andrew — flick Richard an email and he will look after you!

Regards
Michael

Kapilv WELCOME!

I have argued in length with the banks and the bank’s underwriter and the LMI provider about this same issue! sigh….
Here is their argument…which mind you, does make sense; but as you can read later on THEY have created this problem!

1. Student accommodation influx in rent and can not be supported- meaning during certain season and month the demand for student accommodation is less ( ie during x-mas when all the students goes back home etc..)
2. Student accommodation limits the type of use …ie can NOT be rented to NON-students and can NOT be used on the FHOG ( ie can not occupied the place UNLESS your a student)
3. Student accommodation are normally under 50 squ meters,

What does this mean? this mean it’s Hardier to SELL these places if the bank had to foreclose a loan! and they will be forced to sell under the original price.

I finance plenty of Student accommodation, the most common pitt falls are FHO and investors who wants to buy this investment at a 90% LVR ( only possible if you have equity in any another home- PPOR or IP)

End of the day, it;s not “hard” to get finance for Student accommodation… it just requires us broker to present the information about a client in a different and creative way and making sure we ask the right lenders.

Regards
Michael

Yes agree. if it’s going to be a IP…it will contaminate the loan with a re-draw in terms of tax.

Refin with 2+ loan split would be the smarter option.

Regards
Michael

Yes they would, But you must have a LOT of equity to suport this sort of lifestyle and investment. I currently have 7-8 clients using this to build and buy all their properties. 

You would be looking more at the BIG 4 for this sort of strategy…,the small banks tends to get scared espeiclly when you have over 1M.

Regards
Michael

It depends on the council, i mean in my area ( NSW- hornsby) we are allowed subdivision of land and then construct is fine, as long as it meets the land size requirement etc…

If you can’t split the title prior to the construction- you will have a problem….the only way to finacne this IF the bank allows it…is to push both loans thru to the same lender. The deal must be presented well- if its to complex they wont even give it a 2nd thought!

Regards
Michael

It depends on the area and demand…

i have 3 IP:

1- increased by 15% ( 6 month) – Sydney CBD apartment – of course all agreed upon by the tenant
2- increased by 10% (6 month )
3- 5% increase only

Regards,
Michael

Welcome SJP,

Yes you can but there are restrictions, firstly you will need:

1. A solicitor to prepare a contract to say your buying this off the plan and the terms and condition …ie – if the building does not finish within 6 month or what ever the contract is void….end of the day there is a lot you can put into this contract, on yours and your friends agreed terms.

** make sure the subdivision and split title gets approved first ! OR you will have trouble with the finance….

2. Finance approval — this is the Tricky part! to be honest i have done this same deal in the past…but i haven’t done one in the last 6 month!! and the banks tend to change their policy and requirement quite often…SO i will change to check for you….you can email or PMS me more of the details-ie LVR, amounts, Location ( some postcode have restrictions) etc….and i can fund out.

If any another broker can answer this question in the meantime….please do

Regards
Michael

Set 5-10% Increase….CPI is only 2-3% not worth your time…

Regards
Michael

Dust27- your welcome and thanks for the feedback/ testimonial on our company website

Hope to finance your next adventure!

Cheers

Richard good work on the private lender- a shame Yorknxy did not take up your recommendation! Yorknxy – i financed a 23 Squ meter student accommodation in VIC ( echo apartment) only last week..yes it was a private lender. But Yorknxy to be honest reading your post; i think im to scared to touch your loan!!<moderator: delete personal comment> But either way how did you go with this student accommodation? Regards Michael