is it possble to turn your current place of living into an investment property?
We have a block we want to build a new house on in a couple of years.
At present we live in a home owned by my partner that has quite a bit of equity in it.
We would need to sell the home to access all the equity to finance building on our block – but we dont really want to off load it.We were looking at buying another house now purely as an investment property…….wait a couple of yearsd & then sell our current home to get our hands on the cash to build our new house.
That way we end up accessing all the equity we need to build our new house – but also having bought an investment property a couple years prior to.Ideally – we some how set up a trust/or vehicle of some sort whereby my self & my partner are directors of & we 'buy' our current house off my partner as an investment property thru our vehicle.
This way we can access all our equity & keep the same property.We dont particularly want to have to sell it just to release the equity.
Is there a legal way of 'reversing' your principal place of living into an investment property to access equity?Any advice would be appreciated.
regards
TimboHi Timbo
It is possible to turn your current place of living into an investment property, Without selling it.
The problem with buying another house now as an investment property is that most people do not know how to measure the 18 variables there are in any investment property. (interest, inflation, cap growth, rates, vacancy rate etc etc) Most people make there purchasing decision based on emotion and get burnt in the process when the interest rates go up or there is a downturn in the market.
My suggestion would be to get into contact with a man I have come to know over the last couple of years. He used what he has trademarked as "formula for riches" to build a huge multi million dollar property empire and has completed his masters thesis on "residential property as an investment instrument" He also managed to buy 48 properties in 90 days without having to finance any or use any of his own money. You will be able to purchase his property investing course (comes with 6 dvd's and software that makes any property purchase decision a breeze.)
Regarding your "trust" or similar vehicle. The way to do that is to set up a trust (very nb to get the original trust document drawn up correctly, as mistakes are hard to correct later) and "sell" your existing house to the trust vehicle by means of a "credit loan account" in this way the trust then owes you the value of the house, the "loan" you have given to the trust is then repaid via rental income or any other income the trust accrues.A Trust is an extremely efficient and legal way to "conduit" money for tax advantages. One thing I would point out. If you and your partner are the only directors of the trust, the trust will NOT afford you any tax advantages. In order for the trust to work effectively you must be deemed NOT to have absolute control over the assets of the trust. One way to get around this is to appoint an independent trustee, Always remember if you place assets in a trust, they do not form part of your estate and asset base, they belong to the trust.
If you want to get your hands on these great property investing techniques, drop us a return post and i'll send you in the right direction.
Good luck
Wow sorry i dont want to appear negative but the former post is full of holes.
Maybe it is an advertising post for some service offered by Zankee (which i suspect) however there are numerous inaccuracies.
By way of clarification on a couple of points:
1) To utilise the equity in the property and convert the old PPOR to a new IP and to be able to claim the interest on the property you DO need to sell the property albeit to a Trust where you are the Trustees or Unit Holders.. A Transfer form is required and Stamp Duty is payable.
2) A Trust does not have Directors but Trustees.
3) I cannot think of many circumstances where you would appoint an Independant Trustee to control the Assets of the Trust.
4) The trust will NOT afford you any tax advantages…. Again incorrect.There are a couple of options available to you but more information is needed to provide a valid and correct answer.
Save your money do not buy 101 CD's on how to buy properties with No money down as in todays finance climate most do not work or are achievable.
Richard Taylor | Australia's leading private lender
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