Hello All,
My wife and I are currently renting, and have no intention of buying in our current location. We have $170k to invest, and have been looking at properties around the $300k mark returning about 5%. We are about to have our first baby, so my wife will soon be leaving work. The initial plan was to buy the first property in her name, paying at least 50% cash. This will help to generate some cash flow to support the properties that will follow We would then establish a line of credit on the first property and purchase a second property in my name with a IO loan. I have a moderate income, so cash flow will be our limiting factor in this scenario. We would like to leave about 10k in an offset account as a buffer. We have just discovered this website, and would love to hear others opinion on this strategy.
Thanks In advance. salandjus
Welcome to the forum and I hope you enjoy your time with us.
How would show your wife can support the loan when she is not working irrespective of the lvr.
Secondly once you have purchased the property you will find that it wont be so easy to get a LOC in her name if her income is limit.
Why would you not purchase the property in Joint names either as Joint Tenants or as Tenants in common.
Alternatively with a little on the way and assuming the property will be cash flow positive why not look to buy in a Discretionary Family Trust and protect the asset as well as being able to distribute the positive income to the lower marginal tax payers i.e your wife and your child. (Children can for the current Tax year receive cira $2666 without paying anything in the way of Tax.).Richard Taylor | Australia's leading private lender
Thanks for your reply Richard. We were planning to establish the loan before she leaves work, and had cleared it through the bank. What are the advantages and disadvantages of a trust?
cheers.
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