May 28th, 2007
If property investors have 3 or more properties, they need to consider ways of protecting their investment.
Multiple property investment investors need to understand what impact having properties listed under their name, a company name or family trust have on the financial gain that can be achieved from each property investment. Investors in this circumstance must also understand related issues to do with capital gain tax (CGT), profit share/management, property transfer costs and how to pass your property onto children.
Property purchased under the personal name of an investor seems the simplest way to purchase an investment property however, if a current home and an investment property is purchased under an investorĄ¯s name, tax pressure can increase when investors receive rental income, express and capital gains tax. If investors also own a business it is often more appropriate that additional properties are purchased not through their business or company. Additionally, if you are making a late decision about changing ownership of properties purchased and wish to pass them onto other family members, those who inherit the property may need to pay a significant amount of stamp duty.
Difficulties often arise for investors when all their properties have been purchased under their name. This type of real estate investment strategy also makes it difficult for investors to obtain investment loans from bank/lenders. Using the banks money for property investment is critical for effective property investment so it is important that property investors have an investment strategy that is appealing to banks/lenders; ultimately resulting in the greatest financial advantage for investors.
In most instances purchasing property against a company name addresses a number of issues and will enable investors to easily pass properties onto their children or other family members. But if the company has no way of using income generated by the property, then company could face issues such as high income tax payments when the investor decides that the property needs to be sold.
Properties purchased using a family trust can assist investors to overcome obstacles that may be confronted when investing using a company name. Understanding the most appropriate investment model however, requires professional knowledge and skills.
For example, the Victorian Government has increased land tax, which has an impact on investment success for property investors utilizing family trusts or companies for investment purposes. Importantly, if the properties are purchased using different names, investors must be aware of the best way to organize investment property loans that take into consideration this new Victorian Government tax increase.
Loanfor3properties has a 99% loan approval rate with banks/lenders. This success rate reflects the relationships Loanfor3properties has with banks and demonstrates how well Loanfor3properties understands the requirements of banks for home or property investment loan approval.
Loanfor3properties specializes in providing advice to investors about how to organize investment property loans using different property ownership and making home and investment finances fit the most appropriate purpose. Specially, Loanfor3properties can organize finances to meet the varying circumstances of investors, especially where there is the potential to purchase properties using family trusts and companies.
To find out more, please call Loanfor3properties on 03 9529 8898.
