There is plenty of content explaining the benefits of buying property in a trust or company, but very few talk about the reasons to avoid it. Jumping into a complex structure without understanding the lending realities can accidentally limit lender options, restrict the ability to pull out equity, and lock investors out of scaling their portfolios.
In this episode, Arjun Paliwal (CEO of InvestorKit) sits down with Jack from Fouracre Financial to break down the downsides of complex ownership structures. They cover the steep setup and ongoing costs, why trust lending usually means higher interest rates, and why the exact same bank will treat applicants completely differently in a trust versus a personal name. They also unpack the hidden dangers of buying with siblings or friends, including why banks may hit borrowers with 100% of the debt but only credit them for 50% of the rent, and the specific lender policies that can help those already in that position.
Chapters:
0:00, Same Bank, Different Policy: Personal Name vs Trust
1:35, Why Set Up a Property Structure in the First Place?
2:36, The Hidden Setup & Ongoing Costs of Trusts
4:06, Interest Rate Premiums & Losing Negative Gearing Deductions
7:07, How Trust Structures Halve Your Bank Options
8:48, The Loss of Exclusions & Valuations Limits Over the Past Year
11:01, The Bank Policy Trap on Cash Outs
11:41, Buying with Siblings & Friends: The Common Debt Reducer Trap
14:32, Property Share: The Policy That Saves Co-Buyers
InvestorKit - Back To Back "REB Buyers Agency Of The Year 2023, 2024, 2026"
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If you're scaling a portfolio and want the right structure before your next purchase, the team at Fouracre Financial can walk you through it: fouracrefinancial.com.au
HOW WE CAN HELP YOU:
By being the most trusted, data-driven Buyers Agency for aspiring investors who wish to create real financial change by helping them invest with confidence, outperform the market, and build a high-performing property portfolio. https://www.investorkit.com.au
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Disclaimer: The information provided in this podcast is general in nature and should not be considered as personal financial advice. The podcast host, guests, and contributors are not licensed financial advisors. Please seek professional financial advice that is tailored to your situation and circumstances before making any financial decisions.
