Hi all,
Firstly, I have found this forum an excellent resource so far so a big thank you to all the contributors.
Some background info.
Myself and my brother are trying to inform/educate ourselves as much as possible due a recent change in family circumstance. Recently my mother, who is on the pension and resides in a high care facility, was declared incapacitated due to a long term illness and thus Mum's Power of Attorney kicked in and the responsibility for her financial affairs has been passed to us.
Mum has no debt and no other assets except for outright ownership of the family house (where myself and my brother live) with approx value of $420K.
My brother has been employed at a real estate agency for about a year and I have recently finished business studies. After family discussions we have decided that we would look into the possibility of purchasing property in Mum's name.
At this stage we are open to most options as to what would be best for our position however are unsure what would be financially most beneficial. Our current thoughts on utilising the equity in the existing property is to purchase another property (at around 350k) which myself and my brother would tenant at 280p/w and then rent out the existing property (approx 380p/w).
Our goal is to continue to live in either the existing or new property paying the market p/w rental rate whilst optimising Mum's equity position.
The questions are several:
1) IF we followed through with our current thinking what would be the optimal financing structure?
2) Are there different tax implications for pensioners?
3) Is our current idea to purchase 1 property the best strategy to maximise the equity position or are there other strategies that could better optimise the current position. What financing structure would facilitate these different strategies?
I appreciate all responses and hope this isn't too much of a newbie question. We just want to cover all bases before making a decision.
Thank you
Firstly, I have found this forum an excellent resource so far so a big thank you to all the contributors.
Some background info.
Myself and my brother are trying to inform/educate ourselves as much as possible due a recent change in family circumstance. Recently my mother, who is on the pension and resides in a high care facility, was declared incapacitated due to a long term illness and thus Mum's Power of Attorney kicked in and the responsibility for her financial affairs has been passed to us.
Mum has no debt and no other assets except for outright ownership of the family house (where myself and my brother live) with approx value of $420K.
My brother has been employed at a real estate agency for about a year and I have recently finished business studies. After family discussions we have decided that we would look into the possibility of purchasing property in Mum's name.
At this stage we are open to most options as to what would be best for our position however are unsure what would be financially most beneficial. Our current thoughts on utilising the equity in the existing property is to purchase another property (at around 350k) which myself and my brother would tenant at 280p/w and then rent out the existing property (approx 380p/w).
Our goal is to continue to live in either the existing or new property paying the market p/w rental rate whilst optimising Mum's equity position.
The questions are several:
1) IF we followed through with our current thinking what would be the optimal financing structure?
2) Are there different tax implications for pensioners?
3) Is our current idea to purchase 1 property the best strategy to maximise the equity position or are there other strategies that could better optimise the current position. What financing structure would facilitate these different strategies?
I appreciate all responses and hope this isn't too much of a newbie question. We just want to cover all bases before making a decision.
Thank you
