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I went through the whole trust process 2 properties ago and when I got right through the process and bought the property and then went to buy the next property, I was told NAB are not ignoring that lending, but Bankwest will ignore it. I was disappointed in the broker in the case but it worked out because Bankwest was an option, so it turned out the trust set up wasn’t wasted. This trust set up to ignore lending is a game changer. It’s how to go from 4 to 10 properties
I had the similar experience with Commbank where they changed their minds mid process! Luckily had another bank come to the table and a kind seller who allowed extension on finance
CBA also takes guarantor lending into account while doing borrowing capacity. So it would be better if you specify it applies for a few specific lenders
If you can’t afford the time for the whole vid: Bottom line is you still need to be able to afford your repayments, no matter what structure or strategy you put in place. The dollars you earn and control are the ultimate limiter. But for those facing an unfair stone-walling on a mortgage they personally know they can afford, from pen pushers behind a desk, using trust structures for both IP’s and your PPOR is a game changer. 🌱
This is absolutely the best comment and the idea I had in my head all the time . These structures are good for positively geared properties and wealthy.
I have listened 100's of videos about increasing borrowing capacity and I can tell P.K. that this is one of the best. Vineet is a very knowledgeable person. Thank you
What about people who bought 2 properties recently and now would like to do something about structuring them? Is the only way to sell it to the trust by paying stamp duty?
PK this interview is absolutely gold. Thankyou. You going back and reasking for those of us close to their max capacity. Of what to do etc. Im at 3 houses and not far off my max of which one house is quite poorly performing. This has given me a lot to consider over my ongoing strategy. I might engage with this company from here.
Absolute legend, thanks P.K and Vineet I've been loving watching and learning from your video's and shoutout to Monica for the previous video I watched, she is such a polymath! Please YES keep them coming.
PK, I think a good video you should make is talking to someone or explaining the situation of when things go wrong with investing. The positive theory of all this lending and capital growth, rental yields etc is all exciting to hear, but if something bad was to happen it’s not as simple as just saying that someone can sell their assets - no one talks about the bad times.
@@AusPropertyMasteryWithPK could you link to that video? I’ve watched so many of yours now but nothing spoke about the borrower drawing equity to keep buying properties and how they get into financial trouble (career, health etc) and they can no longer afford to service the debt, tenants move out, or bad tenant trashes the property and the downtime between repairs and finding a new tenant isn’t recoverable through landlord insurance. Plus rates have gone up considerably the last couple of years, there must have been someone in this situation.
@@AusPropertyMasteryWithPK I was thinking that. Oh well, one to think about perhaps for a future video - no one discusses the topic…….and I block so many ads on social media these days talking up how great property investing is now that I’ve shown some interest
@@lukedelI mean this with respect. Your question is valid but you won’t find that information anywhere. You’ll find the path when you start. Action is key, with a plan and a little wisdom. Once you get your first two properties, something happens. The pennies start to drop and just get it. I know this is somewhat of a frustrating answer.
I'm a few months away of buying my first property (either PPOR or investment, haven't decided yet, lol). This vid definitely made me think about setting up a teust now. Thanks PK and Vineet.
good and detail of trust. can you please touch more on pros and cons of using trust and the exit strategy, CGT, inheritence, negative gearing, deposit etc
The con is that you cant claim any loan interest, expenses or depreciation on your tax, so you get nothing back in your tax return. This video is absolutely nonsense.
Thanks PK for allowing a fantastic topic on your forum on how the right lending strategies can help an average family build their wealth via property investing. It was a great pleasure to share some key insights.
One of the best of your videos Pk, I was talking about a trust yesterday to my broker but I have no time to set up for the current investment, next time. The guest gave us an awesome overview about to go and look for the right structure. Thanks PK.
Thank you so much gor tje great informative information to get the right structure for the new beginners of new investors to give them bette ideas how to start great investing on properties.
Great episode guys!! Last year I brought a two bed two bath apartment want wanted to expand my investment portfolio went to a lender so can use the equity and gauge what’s my borrowing capacity. The amount I can borrow way short to invest in any Unit under 390k. Instead I brought Tesla Model Y on personal loan. I’m single income person living by myself no kids no family.
This is great PK, thank you for this! I wasnt aware of trust structures and how it all works. I am currently maxed out in my borrowing, its great to know these strategies. 😊 opens another perspective to the current situation.
There are about 5 or 6 lenders who will disregard property held in trust. Once your have a property in trust with them, they can't "un-see" it. So then you're again stuck with 5 properties.
@@U.s.e.r.3493 all of the lenders. once you put your application into their system. they put into their database. it means they will not be able to "unseen" for the next application
How is buying your PPOR in a trust going to preserve borrowing capacity? Doesn't it need to be self sufficient...? With no income for the property you surely can't say that paying all costs as the owner makes it self sufficient...
Apologies if i missed it. What kind of trust are we referring to in the example "couple with 2 dependents"? Would this be the same kind of trust for a single with no dependents
Hey PK, Long-time fan here! I had to do a double-take with your latest guest. It felt like they were dancing around your questions like they were on a game show called "Avoid the Point." 😂 Not once did they spill the beans on which trust structure to use-no bear trust, corporate trust, or discretionary trust in sight! They talked around it more than a cat circles a laser pointer! Anyway, I had to stop halfway through to save my sanity. Still love your content, though! Keep up the great work, PK! Just maybe get guests who like to, you know, actually answer questions next time? Cheers!
Thanks for feedback mate, to help you out, it’s a discretionary trust with corporate trustee.. but always check with your own broker and accountant too ☺️
For someone who reached their maximum borrowing capacity and the only option I can see is selling my Investment property to a trust to preserve my borrowing capacity. Once I sell my IP to a trust, does that mean I can use the equity in my PPOR again to buy another IP? Because Vineet mention that he doesn't recommend selling the IP to a trust. Has someone done this? Thanks!
This can be considered after completing a detailed analysis with your accountant. Remember borrowing is a combination of income, deposit and debt. Your move may be able to open borrowing if correctly executed but income has to then support the next purchase. Reach out for detailed conversation
If you do a trust structure and it is considered as a separate entity does that mean you are losing some of your tax benefits say depreciation etc, because you cant offset a different entity's lost to your own?
I am curious to know with this type of structure, when it comes to utilising the equity of the property/properties within the trust- will it be easily accessible noting the servicing will be assessed by existing rental incomes and deficit may be mitigated by individual's income. With the income threshold that it was mentioned, I find it maybe rather difficult for people to save up 24% for a property purchase each time if they were not able to utilise the equity easily.
Hi Pk, I am pretty sure you asked the question but there was no answer, how much (approximately) would you say is the deposit % required to make a trust self sufficient with the current interest rates?
Whats the lvr requirement for trust and do they still consider only 80% to 70% of gross rent? Ie. If 70% of gross rent causes a negative cashflow but 95% does not, do you then need a garuntee requirement
This is partially correct. Most lenders need you to get a letter to state that the trust is trading profitably, which in the current context it would not be. Slightly breaking responsible lending regulations with this advice
Interest only with 100% offset account enables you to save the principal and that is providing a reduction of interest exposure whilst enabling access to the offset for a rainy day or if a great opportunity occurs and you need a deposit.
The point he was making is that PI preserves borrowing capacity better. Your example doesn’t address borrowing capacity. It’s correct but tangential to the topic
Banks have no clue with lending, i was with a lender and had a loan paid out in full sitting jn a offsetf account yet had to leave bank through broker and jump to an other lender ..... all because im self emoloyed , madness. I feel for first home buyers.
I have two accounts with comm bank, one is more regular spending , the other more for minimum and essential transactions. Does this work, or do they have to be separate banks? I also use my credit card for transactions and clear the balanxe every month to try to build my credit lending
Hello, my situation has changed and now I have to try to use a relative as guarantor, my question is will I still be able to purchase the property under a trust in this senatio? Thanks
Thanks, PK and Vineet I watched the full video and found that a Trust might be a better option depend upon my choice and circumstances. It’s a big yes for me. However, in the future, if you could elaborate more with couple of scenario-based examples on how serviceability will increase with a Trust compared to having a property under an individual name, that would be great.
this content is soo good but so sharp that walking on that edge you can see PK face like yezzus I'm not sure if we should be exposing this strategy, haha I mean I would totally do it myself but that little part where the banks should not know about the other trusts you have is kinda of fraud, I mean you would have to go to the lender that would not '"ask you" about it...
It's not possible for lenders to NOT know about about the trust as you will be listed as the Director of the company that owns the trust. This premised if this video is false. These guys are spreading fake news.
This highlights how broken the Australian property market is. People who can afford are driving prices to crazy inflated levels. While the rest are getting increasingly homeless. p.s. I am not homeless, and technically a millionaire. But the system is fucked by the greed. 😂
@pk what if wife is on maternity leave and only way to buy under trust is to wait 6 month from now..would you buy in personal name or wait.pleaas advice
We had the same thing, some banks have a maternity policy where if you can show you have cash that will cover the time off, they'll treat wife's income in full. Mortgage broker did the research for us!
Holding properties in companies is not a common practice in AU which makes them difficult to trade. Also it will become a trading structure and tax implications could be different.
Hi PK , I am new to this channel. Just want to get an advice if you don’t mind. I have an investment property currently in negative gearing and l am paying P&l @ 6.2% . So l asked my broker about changing it to interest only and he advised me that the rate will be around 6..8% . What is your opinion on this
One of the things that I find difficult to figure out is when is it worth investing in more property vs keeping money in offset against existing property. Savings in offset is saving me 6.1% interest untaxed and with basically no risk, so I suppose the combination of rental yield + capital gain of any investment has to be higher than that after tax, which seems quite significant?
I think I’m missing something - how could buying a PPOR in trust help your borrowing capacity when it will not be self sufficient as an entity? Are you paying your trust rent to make it so?
Another thing I never see around these conversations is this: You need to get a solicitor’s advice on the lending within the trust because you are effectively going guarantor for the trust loan. It’s $1,700 for a solicitor to read your obligations and witness the signing. No way around it either. Make sure you factor that into your costings
With Trust I cannot get the free land tax threshold. The trust management fee is another one. If you own apartments only then the trust would be a good option.
@@EastWood2004 no need to buy a property with $1m land value. Buy affordable and diversify. Anyway, feel free to disagree, I’m just trying to bring alternative views to help folks
Different strokes for different folks. You been listening to greame holm pk? 😜 Nice episode very interesting to hear this strategy. I’m assuming paying down PPOR debt is another way to increase borrowing if I’m not mistaken since you would no longer have a 20k-50k P/A bill to pay?
This broker has forgot a very basic and key element, which is "Land Tax" so the reason you want to have 1 Trust per Property or maybe 2 depending on Land Tax Threshold calculation vs Trust setup cost. Having many properties in 1 single Trust as recommended by him is a no go for me on this basis.
It’s a cost vs benefit.. on a $500k property you maybe be spending another 500 a year on land tax (more in vic), but this is less than the cost of a whole new trust. We did cover it, have a re-watch. Depending on price point and state, the ideal number may be 2-4 properties per trust
@@Rajeevv777 if you hold them long enough, the growth will eventually trigger the threshold. But, what’s a bit of land tax if you’re hundreds of thousands in front.
400k is mid-income Australian family? I thought the 250k would be the middle of that range or towards the top but he started that range there. Would that be an elitist strategy then?
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Yes, please invite more mortgage brokers talking about structures - very helpful. Thank you
He categorised 250k to 400k (household) as the Mid income group. At that moment, I fell off my chair.
I though it was worth double clarifying too
🤣
That’s inflation for you
Well we're definitely not quiet there...
I'm interested to know how the trust distributions are taxed assuming the trust is positive cash flow..
I went through the whole trust process 2 properties ago and when I got right through the process and bought the property and then went to buy the next property, I was told NAB are not ignoring that lending, but Bankwest will ignore it. I was disappointed in the broker in the case but it worked out because Bankwest was an option, so it turned out the trust set up wasn’t wasted.
This trust set up to ignore lending is a game changer. It’s how to go from 4 to 10 properties
👍🏼
I had the similar experience with Commbank where they changed their minds mid process! Luckily had another bank come to the table and a kind seller who allowed extension on finance
CBA also takes guarantor lending into account while doing borrowing capacity. So it would be better if you specify it applies for a few specific lenders
If you can’t afford the time for the whole vid: Bottom line is you still need to be able to afford your repayments, no matter what structure or strategy you put in place. The dollars you earn and control are the ultimate limiter. But for those facing an unfair stone-walling on a mortgage they personally know they can afford, from pen pushers behind a desk, using trust structures for both IP’s and your PPOR is a game changer. 🌱
Thank you
This is absolutely the best comment and the idea I had in my head all the time . These structures are good for positively geared properties and wealthy.
@@joncandyfliprecords thanks. RUclips needs more commenters like yourself besides the useless comments like 'this is a great video!'.
Let's get this comment to the top boys.
@@prashugrashu Let's do it! ✌
I have listened 100's of videos about increasing borrowing capacity and I can tell P.K. that this is one of the best. Vineet is a very knowledgeable person. Thank you
Thanks mate if you got value from the video. We love to help our clients.
Single person here with about 100k income and listening to the mid-income range just smashed my interest in the video lol
You're missing the point .
Bring vineet back he is very transparent about everything and he is very knowledgeable i would love to see him again
What about people who bought 2 properties recently and now would like to do something about structuring them? Is the only way to sell it to the trust by paying stamp duty?
PK this interview is absolutely gold. Thankyou.
You going back and reasking for those of us close to their max capacity. Of what to do etc. Im at 3 houses and not far off my max of which one house is quite poorly performing. This has given me a lot to consider over my ongoing strategy. I might engage with this company from here.
Absolute legend, thanks P.K and Vineet I've been loving watching and learning from your video's and shoutout to Monica for the previous video I watched, she is such a polymath! Please YES keep them coming.
This guy is very knowledgeable and definitely gave lots of useful insider tips!
This guy is good. One of the best trust videos I’ve seen.
The penny has finally dropped 🙏🏼 thank you for sharing and being so transparent
PK, I think a good video you should make is talking to someone or explaining the situation of when things go wrong with investing. The positive theory of all this lending and capital growth, rental yields etc is all exciting to hear, but if something bad was to happen it’s not as simple as just saying that someone can sell their assets - no one talks about the bad times.
I did one at the start of the year on worst case scenarios for the market
@@AusPropertyMasteryWithPK could you link to that video? I’ve watched so many of yours now but nothing spoke about the borrower drawing equity to keep buying properties and how they get into financial trouble (career, health etc) and they can no longer afford to service the debt, tenants move out, or bad tenant trashes the property and the downtime between repairs and finding a new tenant isn’t recoverable through landlord insurance. Plus rates have gone up considerably the last couple of years, there must have been someone in this situation.
@@lukedel it was more what could make the market crash
@@AusPropertyMasteryWithPK I was thinking that. Oh well, one to think about perhaps for a future video - no one discusses the topic…….and I block so many ads on social media these days talking up how great property investing is now that I’ve shown some interest
@@lukedelI mean this with respect. Your question is valid but you won’t find that information anywhere. You’ll find the path when you start. Action is key, with a plan and a little wisdom. Once you get your first two properties, something happens. The pennies start to drop and just get it. I know this is somewhat of a frustrating answer.
I'm a few months away of buying my first property (either PPOR or investment, haven't decided yet, lol). This vid definitely made me think about setting up a teust now. Thanks PK and Vineet.
good and detail of trust. can you please touch more on pros and cons of using trust and the exit strategy, CGT, inheritence, negative gearing, deposit etc
The con is that you cant claim any loan interest, expenses or depreciation on your tax, so you get nothing back in your tax return. This video is absolutely nonsense.
Thanks PK for allowing a fantastic topic on your forum on how the right lending strategies can help an average family build their wealth via property investing. It was a great pleasure to share some key insights.
how can we connect with you @vineetdanwar
@@krishnacsr2734 pls contact on the official website mentioned by PK in video description,
How can I contact you?
How can I contact you?
@@rsarajeev7877 Hi Rajeev, details are mentioned in the description. Somehow I can't type it here.
One of the best of your videos Pk, I was talking about a trust yesterday to my broker but I have no time to set up for the current investment, next time. The guest gave us an awesome overview about to go and look for the right structure. Thanks PK.
Thank you so much gor tje great informative information to get the right structure for the new beginners of new investors to give them bette ideas how to start great investing on properties.
Great episode guys!! Last year I brought a two bed two bath apartment want wanted to expand my investment portfolio went to a lender so can use the equity and gauge what’s my borrowing capacity. The amount I can borrow way short to invest in any Unit under 390k. Instead I brought Tesla Model Y on personal loan. I’m single income person living by myself no kids no family.
What on earth, you went from looking to expand with good assets to taking bad debt to buy depreciating assets? Terrible decision
More mortgage brokers please. Detailed explanations from various financial positions. Especially broke 😅.
Thanks your doing a great job
Does an accountant letter helps with releasing equity again and again from property bought under trust
This is great PK, thank you for this! I wasnt aware of trust structures and how it all works. I am currently maxed out in my borrowing, its great to know these strategies. 😊 opens another perspective to the current situation.
Yes PK for sure i think as Vaneet mentioned right structures really makes a difference
There are about 5 or 6 lenders who will disregard property held in trust. Once your have a property in trust with them, they can't "un-see" it. So then you're again stuck with 5 properties.
Names?
@@U.s.e.r.3493 all of the lenders. once you put your application into their system. they put into their database. it means they will not be able to "unseen" for the next application
Yes!
Thank you so much for the video, incredibly helpful
Great if you got value from the podcast.
Well don Pk, thank you for all the information! You’re a rocket ❤
YES! Thanks for that
How is buying your PPOR in a trust going to preserve borrowing capacity? Doesn't it need to be self sufficient...? With no income for the property you surely can't say that paying all costs as the owner makes it self sufficient...
Great info. Very much appreciate it. You gents are absolute legends.
Also, can this be done within an SMSF?
Apologies if i missed it. What kind of trust are we referring to in the example "couple with 2 dependents"? Would this be the same kind of trust for a single with no dependents
I learned a lot of information from this video.. Thanks so much. No PPOR, but wanting to invest. How could we reach out to Vinette.
My email details details are mentioned in the caption.
Hey PK,
Long-time fan here!
I had to do a double-take with your latest guest. It felt like they were dancing around your questions like they were on a game show called "Avoid the Point." 😂 Not once did they spill the beans on which trust structure to use-no bear trust, corporate trust, or discretionary trust in sight! They talked around it more than a cat circles a laser pointer! Anyway, I had to stop halfway through to save my sanity. Still love your content, though!
Keep up the great work, PK! Just maybe get guests who like to, you know, actually answer questions next time?
Cheers!
Thanks for feedback mate, to help you out, it’s a discretionary trust with corporate trustee.. but always check with your own broker and accountant too ☺️
Great knowledge! PK who is your best broker for first home buyer? Thank you so much
Good video. Using a whiteboard and drawing it would have made it excellent and easier to understand. Thanks.
For someone who reached their maximum borrowing capacity and the only option I can see is selling my Investment property to a trust to preserve my borrowing capacity. Once I sell my IP to a trust, does that mean I can use the equity in my PPOR again to buy another IP? Because Vineet mention that he doesn't recommend selling the IP to a trust. Has someone done this? Thanks!
This can be considered after completing a detailed analysis with your accountant. Remember borrowing is a combination of income, deposit and debt. Your move may be able to open borrowing if correctly executed but income has to then support the next purchase.
Reach out for detailed conversation
Using structure in the beginning will prevent negative gear isnt it?
If you do a trust structure and it is considered as a separate entity does that mean you are losing some of your tax benefits say depreciation etc, because you cant offset a different entity's lost to your own?
How do you show that a PPR bought in trust is positively geared to use this strategy? Do you personally need to rent it from the Trust?
Accountant should be able to guide you. Certainly not an easy ask.
Yes for mortgage brokers. This was great
really good pk please do invite more i would appreciate if you discuss commercial property lending options too
thank you
I am curious to know with this type of structure, when it comes to utilising the equity of the property/properties within the trust- will it be easily accessible noting the servicing will be assessed by existing rental incomes and deficit may be mitigated by individual's income. With the income threshold that it was mentioned, I find it maybe rather difficult for people to save up 24% for a property purchase each time if they were not able to utilise the equity easily.
A good question for a broker!
There are no issues in accessing equity
Fantastic video PK and Vineet, thanks so much 🙌
very cool .. Superb!!!
Yes !! brilliant
Hi Pk, I am pretty sure you asked the question but there was no answer, how much (approximately) would you say is the deposit % required to make a trust self sufficient with the current interest rates?
Great video! Yes for more videos please.
This is fantastic information
great information thanks!
Please explain every property demands council rates, water rates, property tax right. How can i pay with a normal wage??
But high yield property that cover the expenses
Where can i get in contact with this man or someone that knows this stuff so we can write up a plan?
Vineet.danwar@bluehive.com.au
Whats the lvr requirement for trust and do they still consider only 80% to 70% of gross rent? Ie. If 70% of gross rent causes a negative cashflow but 95% does not, do you then need a garuntee requirement
Lending assessment requirements are the same as borrowing in individual names
really good info, thanks guys
Yes Thankyou appreciate learning this gem.
Corporate trust Im assuming?
This is partially correct. Most lenders need you to get a letter to state that the trust is trading profitably, which in the current context it would not be.
Slightly breaking responsible lending regulations with this advice
How about buying IP via 50% individual + 50% trust?
Interest only with 100% offset account enables you to save the principal and that is providing a reduction of interest exposure whilst enabling access to the offset for a rainy day or if a great opportunity occurs and you need a deposit.
The point he was making is that PI preserves borrowing capacity better.
Your example doesn’t address borrowing capacity. It’s correct but tangential to the topic
Banks have no clue with lending, i was with a lender and had a loan paid out in full sitting jn a offsetf account yet had to leave bank through broker and jump to an other lender ..... all because im self emoloyed , madness. I feel for first home buyers.
I have two accounts with comm bank, one is more regular spending , the other more for minimum and essential transactions. Does this work, or do they have to be separate banks?
I also use my credit card for transactions and clear the balanxe every month to try to build my credit lending
You will need specific answer to your situation. Thumb rule transactions account in a bank where no lending exists or planned
@@VDanwar amazing , thanks so much for responding
IMHO if a property is self sufficient, why bother with trusts …
Hey if you have afew properties in your name already, is it possible to move it over into a trust?
We covered this in the vid 👍🏼
How we connect with Vinit?
Hello, my situation has changed and now I have to try to use a relative as guarantor, my question is will I still be able to purchase the property under a trust in this senatio? Thanks
Depends on whose income is being used for calculations
@@VDanwar that will be my own 100k
@@VDanwar The figures would be based on my own income around 100k
Could someone from the UK, in Australia on a Working Holiday Visa, do any of the things mentioned in the video?
Go ahead, Buy more and more.
Thanks, PK and Vineet
I watched the full video and found that a Trust might be a better option depend upon my choice and circumstances. It’s a big yes for me. However, in the future, if you could elaborate more with couple of scenario-based examples on how serviceability will increase with a Trust compared to having a property under an individual name, that would be great.
But Trust incur more land tax because they have low threshold.
We covered this
Are you holding back information, is this legal?
this content is soo good but so sharp that walking on that edge you can see PK face like yezzus I'm not sure if we should be exposing this strategy, haha I mean I would totally do it myself but that little part where the banks should not know about the other trusts you have is kinda of fraud, I mean you would have to go to the lender that would not '"ask you" about it...
It's not possible for lenders to NOT know about about the trust as you will be listed as the Director of the company that owns the trust. This premised if this video is false. These guys are spreading fake news.
Hi. Thank you for this vudeo. It was really useful. Pleaae get more mortgage brokers in and i woukd like to talk to v about my journey
Request on how can i connect to Vineet
Please check the description.Thanks
This highlights how broken the Australian property market is. People who can afford are driving prices to crazy inflated levels. While the rest are getting increasingly homeless.
p.s. I am not homeless, and technically a millionaire. But the system is fucked by the greed. 😂
@pk what if wife is on maternity leave and only way to buy under trust is to wait 6 month from now..would you buy in personal name or wait.pleaas advice
We had the same thing, some banks have a maternity policy where if you can show you have cash that will cover the time off, they'll treat wife's income in full. Mortgage broker did the research for us!
@@Rajeevv777 thanks rajeev appreciate your response. Did you use end up using trust for IP or personal names..thank you
@@karansharma7338trusts in the end
My question is why use trusts and not companies? In NZ companies are way more popular than trusts. Mind you we dont have land tax .
Holding properties in companies is not a common practice in AU which makes them difficult to trade. Also it will become a trading structure and tax implications could be different.
Hi PK , I am new to this channel. Just want to get an advice if you don’t mind. I have an investment property currently in negative gearing and l am paying P&l @ 6.2% . So l asked my broker about changing it to interest only and he advised me that the rate will be around 6..8% . What is your opinion on this
Good content! Thanks PK and all your mortgage brokers and accountants guest!
Thanks for the feedback!
Please be mindful of trust won’t give you negative gearing 😢. It is dangerous and illegal for broker to provide ‘tax advice’ and ‘financial advice’!
One of the things that I find difficult to figure out is when is it worth investing in more property vs keeping money in offset against existing property.
Savings in offset is saving me 6.1% interest untaxed and with basically no risk, so I suppose the combination of rental yield + capital gain of any investment has to be higher than that after tax, which seems quite significant?
100% I did a video on this around march inthink
Yes, more brokers pls
wait is he saying that you could use a guarantor for a trust?
That's the secret sauce right here
I think I’m missing something - how could buying a PPOR in trust help your borrowing capacity when it will not be self sufficient as an entity? Are you paying your trust rent to make it so?
You can ask Vineet directly, but the idea is as a guarantor of the trust you make the normal contributions into the trust to meet repayments
Buying a ppor in a trust negates the main residence cgt exemption. Highly recommend you dont.
Yes.
Another thing I never see around these conversations is this: You need to get a solicitor’s advice on the lending within the trust because you are effectively going guarantor for the trust loan. It’s $1,700 for a solicitor to read your obligations and witness the signing. No way around it either.
Make sure you factor that into your costings
Good point well made
I found some for $900
Do you still have the benefit of negative hearing when investment properties are purchased under a trust ? I was hoping you’d cover this point..
No instant gratification. on a long term basis no benefit is lost.
losses are trapped within the trust.
How do i get in contact with vineet for investment advice? On trust structures
Please see description of vid
What trust structure are we talking about? Company Trust?
Discretionary with corporate trustee.. but always check with your accountant
i think to take loan on trust....have to show 2 years profit..
@@Mahdi20832 nope. You’ll find the funder will want a trust and corporate trustee company with no business and no transactions.
90% of people own 3 properties because that stat is from individuals tax returns - of which their trust owning properties wouldn’t appear.
Sorry, did you just say that ATO don't see Trust occupants?
@@leonie563 no
good point
@@jonathanroy5924 You can't hide that much anymore. It isn't the 80s or 90s anymore.
How to we connect with Vineet?
My email Details are mentioned in the caption.
Trust? it means business..... have to show 2 years profit....
isn't that correct?
Trust is a structure.. not a business.. even in business there’s ways to get a loan with less than 2 years
No
With Trust I cannot get the free land tax threshold.
The trust management fee is another one. If you own apartments only then the trust would be a good option.
We covered this. Land tax is immaterial in context of gains to be made. Diversify across states
@@AusPropertyMasteryWithPK I don’t agree with this. The threshold is 1 Mil in NSW. 1.7% of 1 Mil annually is huge.
@@EastWood2004 no need to buy a property with $1m land value. Buy affordable and diversify.
Anyway, feel free to disagree, I’m just trying to bring alternative views to help folks
Different strokes for different folks. You been listening to greame holm pk? 😜
Nice episode very interesting to hear this strategy.
I’m assuming paying down PPOR debt is another way to increase borrowing if I’m not mistaken since you would no longer have a 20k-50k P/A bill to pay?
Hey yes paying off debt helps but is not really a scalable strategy… I’ve heard of him but never heard his stuff
yes
Yes
Yes
This broker has forgot a very basic and key element, which is "Land Tax" so the reason you want to have 1 Trust per Property or maybe 2 depending on Land Tax Threshold calculation vs Trust setup cost. Having many properties in 1 single Trust as recommended by him is a no go for me on this basis.
It’s a cost vs benefit.. on a $500k property you maybe be spending another 500 a year on land tax (more in vic), but this is less than the cost of a whole new trust.
We did cover it, have a re-watch.
Depending on price point and state, the ideal number may be 2-4 properties per trust
But PK having property under Trust would Incur more land tax because Trust have low land tax threshold
Depends on the state and land threshold. The ones PK has in his client examples (on his FB group) don't usually meet that threshold
That's why you diversify, don't just buy in one state
Zero threshold for property in a trust. You pay on the first property
@@Rajeevv777 if you hold them long enough, the growth will eventually trigger the threshold. But, what’s a bit of land tax if you’re hundreds of thousands in front.
@@nq6417 I've got states that both do and don't charge with different trusts - depends on the trust and $$ that's the land is worth
Yes please :)
400k is mid-income Australian family? I thought the 250k would be the middle of that range or towards the top but he started that range there. Would that be an elitist strategy then?
No. Its more critical for families on lower income groups to preserve borrowing capacity