I need some advice from you...

[whatmakesmehappy]

Hi all,

I have been reading the threads today and thought this site is very useful, so I'm hoping that some of you could give me some advice.

We have one very low end investment property that we bought a few years ago. We didn't think about LAQC at that time. Now, we're looking for a property for investment again and want to know whether we should have LAQC before we buy another property.

1.Would you recommend LAQC, so that I could buy a bit more expensive ones which the rent won't cover the mortagee?

2.Properties that make loss put them in LAQC and the other ones that make profit without LAQC? Is it okay to do that way? Or in any how as an investment, LAQC is better than just buying with both of our names?

3. Do you know any good accountant in Wellington/Porirua/Kapiti/Lower Hutt area?
It would be great if you could recommend any good accountant for us.

Thanks very much.

[MoatMaster]

An LAQC has a couple of advantages. If shareholders incomes are significantly different in that they are at different tax rates, an LAQC allows losses to distributed against personal incomes to maximise tax efficiency. i.e if one partner makes significantly more than the other, then more of the losses can be shifted to the higher income earner - more tax break. In a partnersip you must distribute losses 50/50. Not alot to be gained if one parter is making little or no money - therefore no tax advantage.
In addition, an LAQC can make selling property, either partiallty or wholly, much easier. No legal costs incurred, as only need to sell shares.

There are other factors that should be taken into consideration when working outthe overall efficiency of your investment.
Do you have a personal home loan? Is yor lending one both properties structured efficiently.
If you have a personal home loan and an investment property making a profit, one would ask again if your loan is structured properly.

[Rosco]

Hi,

A lot more information is needed to work out what structure is right for you. We can guess at your situation on this forum, but without a full meeting or lots of correspondence with a structure expert, you may end up with the wrong advice. For example say you currently have a court case pending against you, where you may be liable for major damages. In this case asset protection may be very very important to you, and perhaps a Trust could be a better structure. But without meeting or talking to you, this information may not be discovered.

So I hate to say this line and prefer to give good advice on this forum, but "meet with a structure expert, or at least talk to one after providing them with email information". Generally the only structure experts or property accountants I would deal with (most are useless) would be myself (yes I'm biased) or GRA.

Ross

[freezinhot]

1.Would you recommend LAQC, so that I could buy a bit more expensive ones which the rent won't cover the mortagee?

Try and buy a property where the rent DOES cover the mortgage, should not be to hard nowadays if you look hard enough.

FH

[action]

I agree. Buy only property that rent covers mortgage, and other expenses etc otherwise you will ending up slaving away just to pay for your properties instead of the other way around.
helen

[MoatMaster]

Make the time & effort to sit down with a good accountant that you trust, & is up with the play with property investments and associated entities.
There are far more variables involved that should be considered.

An experienced professional that you build a working relationship with, and you invest the time & money into allowing them to understand you and what you are aiming for, is money in the bank.

[evie]

Hi there, firstly i think it is most important to educate yourself with LAQC, Property tax and study your financial position - before you embark on a very exciting and could be stressful journey.

Asking only these 3 questions is not suffice as no one knows about your financial and current situation.

Get a few books on these matters, read them, understand them and ask questions if you dont understand it (I couldnt understand some terminology and asked for help) - as you can put in them into practice once you have more understanding as that only means more control of your choices and decisions.

All the best! Property Investment must be fun! My POV...

[tpr2]

Hi,

A lot more information is needed to work out what structure is right for you. We can guess at your situation on this forum, but without a full meeting or lots of correspondence with a structure expert, you may end up with the wrong advice. For example say you currently have a court case pending against you, where you may be liable for major damages. In this case asset protection may be very very important to you, and perhaps a Trust could be a better structure. But without meeting or talking to you, this information may not be discovered.

So I hate to say this line and prefer to give good advice on this forum, but "meet with a structure expert, or at least talk to one after providing them with email information". Generally the only structure experts or property accountants I would deal with (most are useless) would be myself (yes I'm biased) or GRA.

Ross

I agree with Ross.
(You are lucky here in NZ to as you can get away with just seeing the Accountant )

In Oz you would have to see the planner to get the advice then the accountant to implement the structure and maybe even the lawyer to complete other elements identified by the Planner.

I also think that getting this right is extremely important so it is worth somehow getting in touch with the likes of Ross or GRA. I'm sure their clients are not all local to where they reside.

Don't think having the local accountant is the best way to do things because he is just down the road and you can pop in and see him....

[whatmakesmehappy]

Hi all,

I'm surprised that I got many responses on this issue. Thanks so much! First, I'll read more books and then find a good accountant.

[evie]

Hi all,

I'm surprised that I got many responses on this issue. Thanks so much! First, I'll read more books and then find a good accountant.

ha ha and do tell us how you get on! good luck and remember dont get into PI out of pure greed. Do it cos you are passionate about property and want to have a bit more control over your financial position.

As for a good accountant - recommendations are best.

[Matt Gilligan]

Try the GRA Web

We have heaps of articles and free info on LAQC's on our Webs, click below.

[whatmakesmehappy]

Thanks very much!

The websites are very helpful!

Thanks.

[Scare_Rab]

"Take my Advice" ... "I'm not using it :-)"

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