All Topics / Heads Up! / Renovating property via trusts

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  • Profile photo of MITMIT
    Participant
    @millionaire-in-training
    Join Date: 2004
    Post Count: 154
    May 28, 2005 - 9:58 am

    I have a couple of questions regarding a renovation I am considering buying. The questions relate using a Unit Trust, Running the Numbers on INvestment Detective and

    Firstly is it legal for me to buy a house in the name of my Unit Trust, rent the whole thing out to the Company owned by my partner and rent back a portion of the non company part of the property via his company? He would also be renting a portion of the property from his company. I would be providing the cash via a director’s guarantee through my own company as Unit Trustee.

    Secondly I am trying to run the number on this property and am finding it difficult to work out the profit after 12 months if I sell it. There doesn’t seem to be any capacity within ID to work this out.

    Also would my unit Trust then be liable for Capital Gains tax after 12 months?

    In running the numbers on this one should I be including the deposit as a part of total cash in if I am to take that money back at the end of the deal? ie. should the return be based on only all the other associated expenses?

    Sorry this is so long winded, I was hoping for some initial advice.
    Thanks
    Sue

    MIT | Owen Real Estate
    Email Me

    Profile photo of Investment DetectiveInvestment Detective
    Member
    @investment-detective
    Join Date: 2004
    Post Count: 105
    May 28, 2005 - 1:58 pm

    Hi Sue

    Legal questions should really be answered by a licensed professional, sorry I can’t help.

    ID is not designed to calculate the numbers for a renovation, it’s primary feature is to evaluate and track cash flow investment properties.

    I have in mind a new calcualtor for doing the whole reno evaluation and tracking, however it is quite a way off yet. I am busy with some cool new features for ID and cut down pocket versions for PDA devices right now.

    Regards

    Philip Batey
    JATPAC Designs

    Author of Investment Detective

    Profile photo of MITMIT
    Participant
    @millionaire-in-training
    Join Date: 2004
    Post Count: 154
    May 29, 2005 - 1:06 am

    Hi Phil

    Thanks for the ID update. I undersatnd that it is work in progress and there are likely to be new features added as you develop this software.

    In regards to the Unit Trust issue, I was just seeking initial comments from forum folk and understand the need to consult a professional, sorry if the question was construed as too complex for the forum. I am still tossing ideas around and am finding it difficult to quantify the costs vs profit involved.

    Thanks for replying
    Sue

    MIT | Owen Real Estate
    Email Me

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