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NEW INVESTOR
Q. I have no debt on my house at present but have been to one of Dymphna Boholt’s property seminars and would like to access equity in my home……where do I start?
A:- A consultation with one of our qualified Finance Strategists will give you the options available to you to make an informed decision on how to access your equity and use those funds as effectively as possible to achieve your desired result. Remember, all of our Strategists are property investors, just like you!
BUYING IN A TRUST NAME
Q. I am purchasing my first investment property and will be buying it in the name of my Trust. What name do I put on the Contract of Sale? Do I need to sign it in any special way?
A:- The purchaser name on the Contract should be for example: ABC Pty Ltd as trustee for The XYZ Trust; or if you are a personal trustee – your name ie Jane Smith as trustee for the XYZ Trust. Sometimes the agent may abbreviate it to “atf” (as trustee for) which is quite acceptable.
BANK ACCOUNTS FOR TRUSTS
Q
. My accountant has suggested that when the loan settles for the investment property I am buying in my Trust’s name I should open a bank account in the Trust’s name to link to the redraw facility that Scott has set up for me. How will this work and what are the reasons why I should do this as I feel opening another bank account will just incur more bank fees for me?
A:- Your accountant may have suggested that you have a bank account in the Trust name which is linked to the loan account for when you wish to make a redraw from the loan. This is great for accounting/tax purposes as it shows clearly the amounts drawn on the loan facility which are tax deductible however, any amount that you draw from your loan (and leave sitting in your Trust’s bank account) will accrue interest payable from the time of drawdown so just be mindful of that. What is the purpose of the Trust in question? Is it one you’ve set up to purchase your first investment in OR is it to operate all your investments through for tax purposes? If it’s just for one property purchase I would suggest that you don’t link it to this loan because you will not be using the loan facility for that investment alone and all future redraws would have to go through that Trust’s Bank Account too regardless of what you are using the money for. That would get really messy. Alternatively you could link an existing account, say a savings account, that you have now with the loan account and just draw amounts as you need it and then move the money from that savings account to whichever investment it is for ie. share trading, purchase of property, renovation on another property etc
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