How to Optimise Cashflow?

But what does your lawyer recommend?

In an ideal world you might have one trust per property, or even 2 trusts per property, but it is not an ideal world - mainly becuase of costs to set up and run and land tax.

 

The dream! Love it!

Although to be fair, i was working from home all this year and only just started going to office

 

My accountant is my lawyer i see what i did wrong there..

I have my PPOR and IP1 in my name and IP2 i bought in a discretionary trust under a company trustee (i am the director and the sole beneficiary currently). My understanding from chatting to him is that any future ones will be recommended to be set up in separate trust structures. Not that i will be buying anytime soon being on P&I on all 3 and having hit my serviceability already.

 

It's a very individual question - for asset protection it's probably one. For landtax (which is my added bonus) I can have up to $1m in each trust before it's makes it viable to open another trust.

 

Thank you, yes i understand. Was wondering how you guys have done it for yourself and the reason and maybe that will help me understand more as my accountant has a clear position on this. and i like the guy, dont think hes misguiding me, but at the same time, want to be able to ask him some hard questions!

 

Family Trust.
I know very little about Trusts, I leave this stuff to my accountant, he does the strategizing.
@Terry_w has some excellent threads on this.

 

Family trust just don't trust the family

 

That's alright as long as he holds a practising certificate.

 

Put it this way....time to change your accountant....he is a real impediment to your wealth building...a total dill...he is guv...

 

If its a unit trust I would agree 100% with the tax advice. There are a number of reasons.
If its a discretionary trust it may also be a factor but a lesser risk.

 

But, but, but how can a Trust completely protect your assets when you still need to give a personal guarantee to banks right?

I have a simple solution make sure all your properties are encumbered, in other words, loans and offsets against them, who would be bothered going for you if there is no money in it.

MTR

 

Its called overkill

 

Show off!

 

This is my fancy stand up desk today

 

ahh not all is lost.... I still see coffee

 

Very far! banks are one creditor of many.

Mortgaging properties in itself won't help because a mortgage secures a loan, if you have borrowed money then you have money...

 

but if your loan is at 80-90% LVR on a property, who will go for you?? there is little or no money in it.

 

Smoke and mirrors really.

But if your loan was 50% LVR and you increased the LVR to 90% that means you borrowed an extra 40% and have moved that money somewhere - into another entity or another property etc.
That is at risk.

 

I have a lazy way.
Buy up to land tax threshold in each major state. That will generally take you to the 5 mil property assets.
That's enough to secure the retirement as long as you have one cycle left.

Relax. Enjoy your life within your wage limitation. Slowly move on to shares.

 

I always lvr at 80%