Hello,
This is the first time I have use the forum board so I hope what I am writing will make sense.
My husband and I have two negetively geared properties within a five min drive from the CBD in Perth W.A.. Both properties have appreciated in value greatly over the time we have owned them.
One of these properties we have decided to develop, and to build two decent sized houses as we have had (up unto three weeks ago) the tenant from hell living there. The mess, state of the house and the damage has left us with no option (we feel) than to demolish and start over. We are now in the early stages of this process. Once completed we would like to keep and rent these homes out. Also the other property is not a development size block so we will just hold onto that one.We will have access to superannuation shortly and would like to use this in our investment stratergies, but not sure what the best way of going about this would be so that we can obtain some positive cashflow. It would be appreciated if anyone could shed some light onto this topic.
We are not sure whether to pay off some of the morgage on our first property (which is not a development block) allowing it to become + cashflow, putting some towards one or both of our new homes we are bulding or to use as a deposit and closing costs to purchase new properties.
Look forward to a reply.Hi Iboffer,
I wish I faced your dilemna.
Your seems to be a structuring issue. I would sit down and draw up a plan for what you wanted to do over the next 5 years, organise a correctly strucured finance package that will provide you with flexibility to do what you want to do and provide the most benefit and go from there.
I would suggest a loan with an offset account would suit you but a complete package would be best.
Sit down with a good broker.
Robert Bou-Hamdan
Mortgage Adviser
http://www.mortgagepackaging.com.auFREE Finance-Related Newsletter – Click Here
Comments made are of a general nature and should not be construed as individual advice.
© 2004 Mortgage Packaging Pty LtdIboffer,
Be careful before you remove money from a super fund. While it is in super its earnings are only taxed 15% and CGT is only 10%. If you roll it over to a pension it could be tax free.Maybe just Maybe consider setting up your own self managed super fund so you have more flexability in what you can invest in. But you cannot buy domestic properties off yourself and a SMSF cannot borrow.
Julia Hartman
[email protected]
http://www.bantacs.com.auI am sure a self managed super fund can do the borrowing though. Will have to confirm, but it could be a way to use you own funds that are locked away.
Byronent
Adelaide SAThank you to all who made suggestions. We will have to look into these options.
Many thanks
liz lbofferSMSF are not allowed to borrow directly, but if you set up a structure they can borrow indirectly. See a good accountant.
Rgds.
Lucifer_auLucifer, could you give an example of how a SMSF can borrow indirectly?
Shawn
Yes I would love to see this example.
It would open up lots of opportunities for me and people around me
Byronent
Adelaide SATo All,
It is not normally a strategy I recommend because it is so costly to set up but a superfund can enter into a joint venture and the other party borrow money. You have to make sure that any property owned directly by the super fund is not used as security but this is possible within a joint venture. Peter Kane at Maroochydore does the legal documents. He is both a solicitor and accountant. He does not see the general public. He will only see clients with their accountant. Last time I spoke to him he was charging $500 per hour. When I go to see him with a client I don’t charge for my time as I consider it a privilege to listen to what he has to say.
Julia Hartman
[email protected]
http://www.bantacs.com.auI can’t see how that would work.
A joint venture meaning two parties owning the same property. Using that property as security for a loan?
Wouldn’t that decrease the security value available for purpose of the LVR by the percentage owned by the super fund.
Would you not also have to be the other party to make it work?
Byronent
Adelaide SAAnother way is to purchase a property in a unit trut with an individual or discretionary trust holding the units. The superfund could then aquire units in the unit trust. The trustee of the unit trust would then use the funds received from the unit trust to redeem the units. the menas the cash in the superfund is effectively replaced with units in hte unit trust.
Terryw
Discover Home Loans
Mortgage Broker
Click below to email meTerryw | 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
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