Assest Protection and Tax Effectiveness.
Have a PPR (worth $435k), and 2 invest properties. One brand new house leveraged off the PPR (with depreciation schedule in place) rented but still highly neg geared; the other (worth only $65K) but outrightly owned and rented (ie;pos geared).
Am wanting to now loan off the pos geared property (not leveraged off and rented at $125p/w) to keep investing in (below $220k) properties with high yields (7% returns with sight of rent increases, and devlopment possibilities in the future). Have done extensive due dilligence in the area and see great potential for growth (capital + yield), even in these economically gloomy times. Unfortunately mortgage insurance in not available to this post code…yet.
So in applying thru a high end mortgage broker and direct with bank it seems Ive hit (in thier eyes) my loaning limit. Not wanting to see this oppuntunity run away am trying to skin the cat in another way. Am solidly employed and feel confidant with my servicability potential thru the pos geared property rental return.
I understand the rational in spreading liability risk thru disassociating personal name and assets by creating a Company, and Trust set up for tax reasons.
In regard to the issue of possibly obtaining more credit thru the creation of a company when personal servicability limit is reached in the banks eyes, by personally guaranteeing the created Company for home loans with a 20% deposit + costs, am baffled.
My query is…isnt the guarantors (me) servicability of the loan to the Company going to be checked ???Can anyone reffer me to an accountant with good knowledge in property investor Company and Trust set up, in the Sunshine Coast Qld area pls?
Yes, having a company will not help servicing if you have problems getting loans in your own name. The lenders will be relying on the guarantor's income.
A possible way around it is to get a friend/family to be involved and get them to be director of the company – it is a big ask though.
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
Must admit got a bit confused on the figures and what you are ultimately trying to achieve.
I understand you are wanting to release equity to enable you to carry on investing but bear in mind just because 1 lender feels you have maxed out your serviceability with them another lender may accept the application.
Would need to actual figures to work the numbers but most things are possible.
Richard Taylor | Australia's leading private lender
Thanx for yr comments Qlds007.Sorry if sounds confusing….
Basis of the post is to find advice on the use of setting up a Company to try it another way to obtain credit for more investing when have been told by my bank that am near my borrowing limit.
Re; try other banks.The lender CBA that Ive all my exsisting loans with (and first asked for more funds), is also the one the broker suggests is the most flexible in Aust for lending to more remote areas, is not willing to lend me just not enough for what iam trying to purchase.
If you can suggest any other banks, or ways of doing this, would much appreciate.Where is the security you are looking to buy located ?
Richard Taylor | Australia's leading private lender
Qlds007.
Would you mind if I phoned you this Monday 27th Oct ?
What time is best for you ?
Regards.Ring me any time you like Monday wil be in all day.
Richard Taylor | Australia's leading private lender
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