So... I'm off to Dymphna Boholt's day tomorrow

If always selling and buying then mistakes are easily fixed.

But I have clients who purchased 5 properties jointly husband and wife and then suddenly decide to become developers. The risk can possibly be limited to one of them, but at least half of their properties will be exposed.

 

Depends on the circumstances. It can make sense.

 

I see what you mean.
I think its easy to ignore and definitely as we were in business we should have considered this, though we sold down our assets to save the bacon so to speak. Some will lose everything.

I also wonder how many people buy in Trust? My guess is very few because they will need negative gearing to offset debt and this outweighs everything? What do think??

 

Why would you want to incur an expense just to save tax? I think that is a very flippant response by your accountant. Spend a dollar to get 37 cents back..
Sound like he is quite lax and maybe not a property specialist accountant but a generalist.
Yes you need to weigh up the cost of the set up and additional acc fees, but this is just part of the opportunity cost analysis when comparing to the cost of land tax.

As for neg gearing. It is a short sighted solution to not buy in a trust simply because it will be neg geared for 2-5 years... In my opinion there are much more important considerations than that to weigh up.

 

Among my clients I would say less than 10%. And my clients are nearly all investors and most with the aim of acquiring multiple properties.

 

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no link? :s

 

The link would have been removed because it's against the site's terms of use to advertise, I"m guessing.
Either that or it was just a mistake

 

That's interesting.
Terryw from stats I have viewed most people wont even have 2 investment properties I am thinking most wont be using Trusts.

 

Bran keeps you regular.......on the forum that is of course !

 

Like Cheech and Chong acupuncture, it is free to for needles to go in, but it costs money if you want them out !

 

Is it possible to do the development under a Trust (with corporate trustee) so that Husband & wife's' assets are safe if things go wrong?

 

Yes.. It was "Mayor Quimby" from SS
That was a good line by line explanation.

I guess the focus was to escape from dangers of running a business. We are more likely to be sued through the business than IPs. Hence, one trustee company for IPs and another one for business.

 

you could have a seperate development trust undertake the development on the land owned by husband and wife.

as long as it was all commercial then no different than engaging an independent development company to undertake the works.

 

Asset protection can be improved. But personal guarantees are generally needed if finance is required.

 

I just got this one in the email. I had a chuckle.

 

Some say she is a spruiker, some say she doesnt own any properties and some are just very fortunate and grateful to have done some of her courses and put that knowledge into wealth creation. Then again I guess there are those that do believe the first two and are still dreaming of actually doing it. Just saying

 

If you were a property advisor and pushed mining towns you are unethical, a spruiker and loose all credibility with me forever. They were flavour of the month and people were given advice on buying in these towns and their eye lit up like they were at a casino.
Any advisor of any worth should be conservative and think of their clients 10-20 year future, not flipping deals and making cash in the 2-5 yr term. That is bad business.

 

Does "Knowledge Source" belong to Dymphna Boholt?

 

Hi another noob here.

Can I ask for a bit of help understanding this diagram, in particular what is the role of the trading trustee company and the piggy bank trustee? Is one of those allowed to rent the property on behalf of the corporate trustee?
"If a tenant is able to sue the landlord then that trust's assets can be at risk. The company will be hit with the lawsuit"...
Which company is hit with the lawsuit?