Property Investing in The 21st Century

Property Investing For Beginners Part 3

This is the third post in a series designed for the real estate investor beginner. Today we will look how you could protect your asset.

Asset Protection

If you intend to purchase more than one investment property, it is a good idea to think how you will structure your investments to protect them and you against any unforeseen circumstances. There are a number of ways that you can do this, and I must stress to you that you seek advice from an Accountant who is also a successful property investor. They will know what the best structure is for your needs.

Let’s have a look at why we would want to protect our asset. The main reasons is if someone has an accident while on your property you as a person are protected from legal backlash to a considerable extent. Another reason that is important to consider is that if you intend to keep your property investment for life, then you will want to ensure that on your death the beneficiary such as your spouse or children will not have to meet with any death taxes or Stamp Duty.

There are many more reasons why you would want to protect your assets, although we will leave them for another time.

The most common way of protecting your investment property is in the form of a Trust structure. There are many different types of trusts, and as mentioned before, you will have to seek expert advice to determine what trust is most suitable to your needs. By having your investment in Trust, you do not physically own the property. Another good idea is not to be the Trustee of the Trust, as this will legally attach you to the Trust. Instead, you could appoint a Corporate Trustee, which is basically a two dollar shelf company that you own.

There are many combinations of ways to set up your Trust and Company structures, and I can not stress enought that you must get good advice before purchasing your property.