But this is legal advice and a broker shouldn’t be giving advice on trusts. An accountant couldn’t even advise on trusts like this and financial planners even less. Best to leave trusts to the lawyers I think.

Your definition of trusts is wrong. A trust is a legal relationship where one person holds property for the benefit of another under…[Read more]

Bloody hell Steve, are you the author of that booklet? The author appears to be a mortgage broker with no legal qualifications. There are some good points in there, but many errors, especially about the finance and asset protection side of things.

Why would a mortgage broker write about a complex legal arrangement such as trusts?

Well lots to consider. You really need to do some reading and then seek specific legal advice.

Perhaps work out the costs first.

I have only ever had a few clients who have done this a and they had heaps of equity so it was done as part of a debt recycling strategy as well.

Why do you want to transfer the property to a trust?

It’s like buying a book. Doesn’t matter if you are registered or not, but sale price includes gst. If you are registered you can claim the gst if not you wear it.

Why a financial planner? This doesn’t involve financial products so licensing needed.

The only way to retire on negative geared propertied would be to either sell one, borrow against one, or wait till the positive cash flow is enough. Or a combo

Prob a serviceability issue. Short term loans will have very high repayments compared to same loan over 30years

extending loan terms to 30 years if possible can help
Changing from IO to PI can also help
Other than this it is maximising income.

Keep in mind it has a few errors and is overly simplistic so don’t rely on it too much, but I think it can be a good intro.

It will depend on the terms he has agreed to with the agent. Most of these agreements would state that where the agent introduces a buy the agent will be entitled to a commission even if the purchase/sale agreement is entered into after the lapsing of the agent’s appointment.

Great Podcast Ziv – just listened to it.

It won’t be easy for them to get finance if they are borrowing the deposit, but they would need at least 20% to avoid having LMI involved with their stricter policies.

Hi Moresh

“We assist property developers in setting up the legal structures”

This is legal advice so you would need to be lawyers to do this.

Stamp duty could be eliminated completely if certain conditions are met – or dramatically reduced.
No investors wouldn’t become liable for the debts of the developer.

Is the company an incorporated legal practice?

Have you considered ways to reduce CGT and stamp duty on a member wanting to take up ownership of a property?

You could keep the mortgage but pay out the loan and redraw and invest at owner occupied rates. Don’t use cash from the offset to directly invest as the resulting interest will not be deductible.

Seek tax advice

Hi Luke

That sure is cheap rent for a property worth so much. It must be under 2% yield.
That is something well worth taking advantage of, but you could still utilise the main residence exemption on another property.

If it is structure advice you are after this is legal advice. Financial advisers will have no idea – yet often still advise on this poorly.

I have done rentvesting in the past, but generally don’t recommend it.

Although you will be saving cash at the moment over time rents rise whereas those paying off of home loan would find the monthly repayments generally remain the same over 30 years. Use of an offset account and paying extra can knock this 30 years down to 10. It might actually…[Read more]

They lender may alternatively want to control the payment of the funds. So you could be approved without access to the funds until the point when you find a property and have entered the contract of sale. The new property may not be used as security but they will want to make sure the funds are used for this.

Cash out over about $50k is a problem…[Read more]

Get some proper advice because you will not be able to claim depreciation on fixtures and fittings unless the property is new. As you will be living in it the property will not be new when you rent it out. Possibly $18k less deductions as a result.