Hi, I am a newbie and need some help. i didnt know where to put this post. Other/Legal/Accounting...its a bit of a mix.
Background:I'm 21 and looking to get into the property market with my brother and cousin. My brother is 23 and just bought his first home in June 2009 for $336k. his current loan amount is $285k. I have been helping him pay it off, as interest inst deductible on PPOR. My cousin is 19. The three of us combined are earning $155k p.a. gross. We can save together $50k per year. We are very close knit as we were living together for the first 17 years of our lives. I understand the importance of writing signed agreements about working together, and will do with solicitor.
From now on the 3 of us want to buy investment property together (1 property at a time, and continue until we have at least 10 properties). We want every property to be in all three of our names. What is the best way to go about this under 2 circumstances.
First circumstance: we buy, renovate and sell after 12 months so we receive 50% CGT discount.
Second circumstance: we buy for long term and keep hold of the investment properties
is it best to just to go to bank/mortgage broker and get a loan under our 3 names or is it better to instead enter into a partnership or trust? if you could tell me for both circumstances please.
I have been reading quite a bit about trusts and i cannot see a discretionary trust being of any use, as we have no spouses/kids, and i heard to add beneficiaries after opening the trust is expensive. unit trusts i guess you can continue to add beneficiaries however we just want this to be between the 3 of us, as we have a lot of trust for each other. plus the cost factor of setting up and maintaining the trusts. so i am not really looking at that, but your opinions will help.
How about partnerships? are they worthwhile? what are the main disadvantages/advantages?
What is better for Investment property: stay as Individuals or Trusts or Partnerships?
Also we want to keep all the capital we put in, income, and expenses separate from our personal finances. if we were to go to bank can we create a bank account for the 3 of us? I'm sure we can, but please clarify!
Instead of just registering our names in the bank account, is it possible to get an ABN and business name (and create a bank account under the business name). We just wanted a business name haha. I am not sure if its possible, or will that make it into kind of a partnership?
last question...if one of us got a loan approved to buy a house, is it still possible to buy the property under 3 names? is there any costs involved/or other factors to consider apart from that we would all be liable for the house if it was under all 3 of our names.
I would be really grateful if you could answer my questions. i also appreciate any feedback and ideas or things that we should/shouldn't do. thanks heaps!
navjit
Background:I'm 21 and looking to get into the property market with my brother and cousin. My brother is 23 and just bought his first home in June 2009 for $336k. his current loan amount is $285k. I have been helping him pay it off, as interest inst deductible on PPOR. My cousin is 19. The three of us combined are earning $155k p.a. gross. We can save together $50k per year. We are very close knit as we were living together for the first 17 years of our lives. I understand the importance of writing signed agreements about working together, and will do with solicitor.
From now on the 3 of us want to buy investment property together (1 property at a time, and continue until we have at least 10 properties). We want every property to be in all three of our names. What is the best way to go about this under 2 circumstances.
First circumstance: we buy, renovate and sell after 12 months so we receive 50% CGT discount.
Second circumstance: we buy for long term and keep hold of the investment properties
is it best to just to go to bank/mortgage broker and get a loan under our 3 names or is it better to instead enter into a partnership or trust? if you could tell me for both circumstances please.
I have been reading quite a bit about trusts and i cannot see a discretionary trust being of any use, as we have no spouses/kids, and i heard to add beneficiaries after opening the trust is expensive. unit trusts i guess you can continue to add beneficiaries however we just want this to be between the 3 of us, as we have a lot of trust for each other. plus the cost factor of setting up and maintaining the trusts. so i am not really looking at that, but your opinions will help.
How about partnerships? are they worthwhile? what are the main disadvantages/advantages?
What is better for Investment property: stay as Individuals or Trusts or Partnerships?
Also we want to keep all the capital we put in, income, and expenses separate from our personal finances. if we were to go to bank can we create a bank account for the 3 of us? I'm sure we can, but please clarify!
Instead of just registering our names in the bank account, is it possible to get an ABN and business name (and create a bank account under the business name). We just wanted a business name haha. I am not sure if its possible, or will that make it into kind of a partnership?
last question...if one of us got a loan approved to buy a house, is it still possible to buy the property under 3 names? is there any costs involved/or other factors to consider apart from that we would all be liable for the house if it was under all 3 of our names.
I would be really grateful if you could answer my questions. i also appreciate any feedback and ideas or things that we should/shouldn't do. thanks heaps!
navjit