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Structuring your investment property purchase

My Mortgage Podcast: Season 2, Episode 3

In this episode of the My Mortgage podcast, Claire and Greg are diving into investment structures and ownership setups, exploring how they impact your borrowing ability and property ownership.

We start today's episode by discussing the three most common ownership structures in New Zealand:

  • Personal names,

  • Look-through Companies,

  • Family trusts.

Each has its pros and cons, especially concerning tax implications and asset protection, and choosing the right structure depends on individual circumstances, income sources, and long-term goals.

We talk about a few examples highlighting the significance of diverse lending across multiple banks, and explain how splitting lending between banks can reduce risk and prevent unexpected financial challenges, such as banks reclaiming proceeds from property sales.

It's relatively common for investment property purchasers to consider interest-only versus principal and interest payments, and how that impacts on serviceability. Banks can assess interest-only lending based on longer terms, affecting borrowing limits and the ability to grow an investment portfolio.

Finally we touch on loan term pressures and the necessity of aligning lending terms with financial goals.

Getting the right Team around you, planning well and understanding the implications of various ownership and lending structures, are crucial for long-term property investment success.


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