Investment steps

I’m hoping to buy some investment property’s now and in future, just unsure of the first step to take, should I talk to an accountant or mortgage broker first then real estate. From what I’ve read buying through a trust or company from the beginning is best. Would I need this set up before I meet with a broker? I’m also confused as to the expenses involved with becoming a landlord, friends I’ve spoken too seem to be paying over $600 a week for their ppor once all expenses are taken into account and turned into weekly payments
(insurance, loan, rates). Could someone shed some light on expenses? Ideally positive cash flow or break even is what I’m after. thank you

 

You need to speak to a Mortgage Broker as the first step, find out what your real borrowing capacity is and how to structure your finances to allow for now and the future.

What makes you think this is the best structure in relation to your personal circumstances?
Trust/Company does not need to be set up before you speak with a broker no, before you purchase a property yes.

Too many variables here, loan amount, property type and location etc etc.

Some basic expenses;
Council Rates
Water Rates
Property Manager fees
Insurances (Building & Landlord)
Maintenance
Body Corp Fees (if applicable)

 

Thank you for your reply, mortgage broker first then! I’ve read a fair bit and a trust structure seems to be one of the better options as it’s secure when compared to having property in my personal name. I think it would suit my long term goals and if I do it from the beginning I won’t have to spend the time and money later transferring from personal to that type of structure. It’s something I’ll definitely need to discuss with an experienced broker first. And thank you for the mentioning some of the costs that’s something I’ll need to work out as well.

 

secure against what?

do you understand the tax and land tax implications for example?

 

No I’m not even sure if we have land tax in Queensland, and as far as tax for a trust I’m not 100% I’ve just read that a trust is more secure and has some other benefits.

 

Yes, there is land tax in Queensland. The problem is, what else don't you know? And do you know the right questions to ask to find out? What happens if the property has a net tax loss?

Start with a good mortgage broker.

Read this forum.
If you can't articulate what 'secure' and 'other benefits' actually refer to, and how they apply to your specific situation, don't do anything until you can. Or have a lawyer explain it to you.

 

Exactly, will need to speak with a professional, the book I read was Australian property finance by Konrad Bobilak, I’ve seen it recommended on this site before and he recommended using a trust for holding property and explains the reasons behind why he thinks that. To me it made a lot more sense than holding in personal name. but again I’m sure it will depend on individual circumstances. I recommended the book as he goes into depth on a lot of things

 

By secure I mean asset protection I thought it was obvious what I meant, my bad. And in regards to other benefits..in future if I’m unable to purchase property through the trust I can in my personal name which will make getting finance easier.

 

Asset protection from whom?
Think you need to read some more, stick around in this site and read as much as possible

 

Where would you recommend I start? And why not have asset protection in place regardless, I don’t see much downside of having it in place. Obviously their are downsides to operating in a trust structure compared to having assets in my personal name. Again something I will need to discuss with a mortgage broker to see if it is right for me. How many IP do you own?

 

When first buying residential investment property it is usual for the property to make a loss. Losses are trapped inside a trust structure and cannot be offset against your earned income.

If you have a large deposit the income from your first investment property may cover the ongoing expenses, resulting in a profit meaning a trust structure may be suitable.

Many investors buy IP’s in their own names and may use a trust to hold higher yielding investments including shares and commercial property.

 

Its like saying why not get an armour plated car with heated seats and snow chains? Do you need that in qld?

 

New people tend to ask how many IPs someone owns. This is understandable, but private investors generally won't reveal this.

People who sell courses and books and youtube content, however, will. But there's no way to verify what they own.

You need enough knowledge to evaluate the content of what someone is saying, not just trust them because they say they have a lot of stuff.

 

Thank you for your comments, like I’ve been saying.. it may not be right for me, I’ll speak to a professional about it. It seems like you are really against it for some reason and I’m not sure why. And yes it doesn’t snow in Queensland, but if it did in the future you would be kicking yourself for not buying chained tyres lol

 

Thank you, something I’ll need to discuss with a professional I know about trustees not being able to claim tax loss and the trust can carry the loss forward for use against future gains. Still looking for a few pieces of the puzzle just need to discuss it with someone that can tailor a plan for my individual circumstances.