My colleague asked my advice as he has purchased his first property, an investment rental property. The house is in a rural area in Tassie and is relatively low value (under $200k). After a small renovation it will be positively geared with a yield of around 9% gross.
The property was hotly contested and sold quickly on day 1, subject to finance with a 14 day period to organise.
Accountant has recommended he set up a FAMILY TRUST with a corporate trustee for assets protection. I have suggested it will be impossible to do this within 14 days, and to then obtain the finance. Would need 30 days plus.
He is in a high risk profession for litigation (young surgeon starting out). However I think he should purchase this in his own name and save the cost of the family trust structure at this time and wait until he owns more significant real estate. The cost of the structure to protect a $200k house with a loan at 90% LVR seems to be overkill in my eyes. I figure he will need to pay $1k-$2k/year to maintain the trust and corporate trustee to protect around $20k of equity.
Would you buy in your own name or go down the Family Trust path?
He is about to marry with no kids and has a wife on lower income and parents he could distribute to from the trust.
The property was hotly contested and sold quickly on day 1, subject to finance with a 14 day period to organise.
Accountant has recommended he set up a FAMILY TRUST with a corporate trustee for assets protection. I have suggested it will be impossible to do this within 14 days, and to then obtain the finance. Would need 30 days plus.
He is in a high risk profession for litigation (young surgeon starting out). However I think he should purchase this in his own name and save the cost of the family trust structure at this time and wait until he owns more significant real estate. The cost of the structure to protect a $200k house with a loan at 90% LVR seems to be overkill in my eyes. I figure he will need to pay $1k-$2k/year to maintain the trust and corporate trustee to protect around $20k of equity.
Would you buy in your own name or go down the Family Trust path?
He is about to marry with no kids and has a wife on lower income and parents he could distribute to from the trust.