Four ways to start your own property investment business
#1: Investing in property as an individual
If you’re new to property
investing, this is probably the easiest way to begin. And if you’re planning on buying just one or two properties.
There are tax benefits from going this route if your property portfolio is small.
#2: Investing in property through a partnership
Going the partnership route is very similar to buying a property as an individual except you share the burden. You and the person you go into partnership with share the liability between you.
This is also a good route to consider if you want to reduce your risks of going it alone and getting additional capital from your partner.
#3: Investing in property through a trust
If you want to build up your property portfolio over the years, this is perhaps the best route for you. By way of an Inter Vivos Trust, a living trust, this gives you protection against any claims made against your property.
So if you get a divorce or have money troubles, your properties are safe in a trust. It’s also an easy way to leave properties to your beneficiaries.
There are also tax benefits with this option, but trusts do attract higher rates of capital gains tax. So if you plan to sell properties instead of holding onto them, this maybe isn’t the best option for you.
#4: Investing in property through a company
One major advantage of investing in property through a company is the lower rate of income tax payable. So if you want to reinvest your profits into more property, a company is worth considering.
But in the event of your death, as you own shares in your property company, these will attract capital gains tax and estate duty.
So there you have it. Four ways to start your own property investment business.
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