offset account also has a higher interest rate compared to LOC.

Kev

There’s no Such thing as No Can’t Do!!!!!

Dear Peter,

Nothing is impossible.

i manage to get 2 deals in NZ less than 50000 NZD in 3 months period from MiniMogul

one 45K and one 48K both giving a return of 15% and 13% respectively

More to come

kev

There’s no Such thing as No Can’t Do!!!!!

i would think it’s better to have it re-evaluated and refinanced.

Hmm, the rent’s low, it’s not exactly cashflow positive is it?

i might want to increase it a bit, esp after you’ve done so much renovation works and all.

There’s no Such thing as No Can’t Do!!!!!

i think it will pay off the home loan first, get rid of it or at least pay it off as much as i could as it’s non tax deductible.

Well if u move after 6-7 yrs, then most likely there are some loans left to pay off.. so u can still use it as IP.

Otherwise, if you are super good n manage to pay it off in 3 yrs like Anita Bell, then u can always use the equity to purchase IPs and it will be on loan repayments again. if that’s what u’re after, Negative gearing.

IF you’re after profit, positive cashflow properties is the way to go really.

anyway, i would prefer to pay off my home loan as much as i could first, use IP to deduct tax, depending again on which taxation bracket u will be in. I’m going to be in the highest bracket 48% when i start work next year, so that would work for me, but ideally i prefer Positive cashflow properties.

cheers,

There’s no Such thing as No Can’t Do!!!!!

lucifer_au,

so hmm that means non family members would benefit from a discretionary trust then? i’m thinking about things like u know same gender couple who are not recognized by law to have same status.. things like that ? or just partners who are not necessarily family members, discretionary trust would be for them then? or would they be better off with unit trust?

Kev

There’s no Such thing as No Can’t Do!!!!!

incorporator is cool, but since it’s about 900-1000 a set up, i don’t think it’s much difference than paying Dale to do it. After all, Geo mentioned that he still charges the same fees regardless of whether u set up a company or not.

So why spend the extra money setting up the company yourself and then pay 2200 for Dale to set up the trust when the 2200 itself includes setting up the company? make sense?

Oh by the way, the trust set up fees, i think that’s a deduction isn’t it?

And NO, you can’t be the appointor, trustee and beneficiary at the same time. Trustee as a company where you’re the sole director is fine. but not in ur name. as it creates legal problems in court later when u do have to sack urself and so on.

btw, Geo, do u know how much he would increase the price to as of 1st July?

Kev

There’s no Such thing as No Can’t Do!!!!!

that’s trust ibuycashflow,

it’s mainly to reduce tax and asset protection, depending on what job you’re in, u may be in a higher risk group, i believe i would be when i start work next year, so a trust is definitely the go, not to mention the tax advantage

There’s no Such thing as No Can’t Do!!!!!

Acey,

That’s what i read in Dale’s book. i still think i will follow MelBear quote from Dale’s book. i still think the appointor is the most powerful person as he can hire and sack whichever trustee to control the investment. Sure, once appointed, that trustee is the one who’s managing it, like the CEO of the trust so to speak, but what if the appointor, who if it’s not u sack u (who’s the trustee) and apppoints someone else in ur place? wouldn’t that be dangerous since as appointor, it is the appointor’s prerogative(is that the correct spelling?) to do so.

There’s no Such thing as No Can’t Do!!!!!

hi Geo,

well the reason i prefer to have a company as a trustee is because if that trustee(company) get sued, i can then as an appointor, Sack that trustee and put another one in place.

I suppose you could do that if you are the trustee, if u get sued, just sack urself and appoint a company or something. But then, i don’t like that idea because that means, i’m the trustee, beneficiary(one of them) and also the appointor. I don’t want to get into a headlock with ATO as that may create some legitimate issues with the trust setting, remembered i mentioned something about not having ur name in all 3 ? as it defeats the purpose of a trust vs individual buying?

yeah something like that. i think a company would be great ( personally ) as a trustee, which i own majority shares of course, so that gives me power to control the company as a director.

also, like i say, if i don’t have that many beneficiaries or have exhausted those low paying beneficiaries, i could then distribute income to the company ( trustee ) as some sort of consultation fees and use that to claim on company expenses, another extra savings of before tax dollars so to speak, second round after u’ve done the first round in ur trust allocations. have to ask the accountant on that, but hey if you can do that with trust, i believe u are able to do that with a company too but with limitations of course, but still before tax deductions no doubt. u know on company cars for the directors? director travel or entertainment allowances and as a director, u get directors fees too don’t u ? Plus u can add that in ur portfolio, Director of XYZ company sounds impressive and all esp when u approach the bank for finance (theorectically speaking)

Hope that helps

I’ve never done any trust before, so these are all what i’ve read and gathers in the past few months.. wil be setting up one soon Can’t Wait !! hehe

Kev

There’s no Such thing as No Can’t Do!!!!!

heya,

Well i think what ArthurK was pointing to is that each trust has a limit in terms of land value. I think it’s 500000 ? before u get taxed for it ? some sorta extra tax levied on the land value of the properties that trust holds.

So when you have a few IPs and the land value is near the limit, then i suppose that’s the time to set up a new trust so to avoid land tax.

Also, u could have different trust controlling IPs from different countries / localities, just to make the management easier perhaps?

Kev

There’s no Such thing as No Can’t Do!!!!!