Hello all,
This is the first time I have posted on this forum and I’d just like to thank everyone in advance for the wealth of information shared. I have browsed through the posts and have learned a great deal. So thankyou all for sharing.
My situation is that my partner and I are just starting out in property. We have 1 investment property in Sydney’s west which is cash flow neutral. We are looking to further our property investing experience.
We have some friends who are interested in teaming up with us and undertaking the journey with us – which is great for us because most of our family & friends are not overly supportive. We are particularly interested in renovating, since we have skills whereby we could do much of the work ourselves. We’re only really interested in cosmetic fixers at this point in time – no structural stuff just yet!
Now my question is that my partner & I had intentions of buying our properties through our company trust. If our friends join in what would be the best arrangement for us for business structuring and tax effectiveness.
Any feedback would be greatly appreciated.Regards
Damien Saaghy
you could still buy your share in your trust and they could buy their share in their own names-or their trust. You could also setup a unit trust and have 50/50 ownership. You existing trust could hold the units in this trust.
It depends on how many you are going to buy together. It may not be worth it to set up a unit trust if you just do one property.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Hi Drafty & Co, not being off-putting, but I’d be more inclined to do the first reno yourselves. Then at least you would have learnt a lot, through mistakes or otherwise. If you partner up with friends, you’d want to be able to put equal money and time into the work, and then after CGT, share the profit if you sell.
We don’t do structural work either, maybe move a wall to make a room larger, eg. larger bathroom, smaller laundry if they back on. Our renos have been mostly cosmetic, one we put a great second hand kitchen amongst other things, in the latest one which we purchased 14 months ago tenanted, we gave notice a few months ago and have updated the cbd doors in the kitchen which were water damaged, added a pantry, new verticals, renewed leaking bathroom, new vanity, taps, shower screen, complete retiling, painting inside and out, some lights, polished floors, gardens, cost $8000 and increased value from $140k earlier in the year to $220k. Rented at $220pw – was $180. And as was said in another post, we always pay our tradesmen when they hand us the invoice. We use the same tradesman for our showerscreens, kitchen updates and plumbing. We go to auctions as well, use a basic colour scheme if you’re going to rent the place as we find tenants want to brighten up with their own colours in furniture, etc.
A couple of years ago most of our friends thought we were crazy to start. We had our own home and another IP. Now we have our own and 10. So be encouraged and do what you want to. This forum is such a help along the way.
Anna
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