\nIn today\u2019s show Ken Raiss<\/b> from Chan and Naylor answers Chris\u2019s question about equity shifting.
\n <\/p>\nTranscript:<\/h4>\n
Kevin<\/b>:\u00a0 I\u2019m going to answer a question in the show that came in from Chris. Chris, I want to thank you for this. Chris writes: \u201cOn one of your recent podcasts, you mentioned the protecting assets through equity shifting. How does equity shifting work, and what are the benefits? Ken Raiss is going to answer that question for you, Chris. Ken, of course, is from Chan and Naylor. In today\u2019s show Ken Raiss from Chan and Naylor answers Chris\u2019s question about equity shifting. Transcript: Kevin:\u00a0 I\u2019m going to answer a question in the show that came in from Chris. Chris, I want to thank you for this. Chris writes: \u201cOn one…<\/p>\n","protected":false},"author":176692471,"featured_media":6740,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[10,11,13,36,17,25],"tags":[101],"class_list":["post-6739","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-kevin-turner-sponsored-channels","category-kevin-update","category-latest-story","category-property-investment-topic","category-property-investment","category-sponsored-channels","tag-podcast"],"yoast_head":"\n
\nGood day, Ken.
\nKen:\u00a0 <\/b>Good day, Kevin. How are you?
\nKevin:\u00a0 <\/b>Well, thank you, mate. Can you answer Chris\u2019s question for him?
\nKen: \u00a0 <\/b>Certainly can. Excellent question, Chris. Equity shifting, as its name suggests, is we\u2019re shifting equity that you have from an unsafe area to a safer area. Let me give you an example.
\nImagine you have a home that you\u2019re going to draw down the equity to use as a deposit to then go and buy another property, what we normally see is people just borrow the equity off their home and then they borrow the remaining 80% of the investment property.
\nWhat equity shift would say is borrow as much as you can against your home \u2013 that\u2019s the one that you want to protect \u2013 not just the 20% \u2013 and then buy the investment property in a trust. The type of trust that you would use would be dependent on your particular circumstances.
\nYou have effectively then bought that property with little debt in the trust, so you\u2019ve moved your equity from your home into the trust, and now you borrow against that equity in the trust as a line of credit for use as a buffer or further purchases.
\nThe advantage is really that it\u2019s pretty low cost. It\u2019s only the cost of the trust, so there\u2019s no lawyers involved. It\u2019s just making sure that you borrow the maximum you can against the property you\u2019re trying to safeguard.
\nKevin:\u00a0 <\/b>You mentioned there, Ken, that the type of trust will depend on your circumstances. That\u2019s where you could help structure that?
\nKen: \u00a0 <\/b>Correct. For wages, people who want to buy the investment property and call it negatively gear against their wages, we have our Property Investor Trust, which is the only APO-approved trust of its type. For people in business, we might use a Business Enterprise Trust. Maybe for people in New South Wales, depending on what they\u2019re doing, we might use a fixed trust. There would be various trusts depending on the circumstances, and we can certainly help Chris or any other of your listeners.
\nKevin:\u00a0 <\/b>Ken, I also understand that you have an e-book that deals with this, as well, have you?
\nKen: \u00a0 <\/b>Yes, we do \u2013 on a number of asset protection strategies.
\nKevin:\u00a0 <\/b>Okay. Well, what we\u2019ll do, Chris, we\u2019ll send you a copy of that, as well. Ken and his team will organize that.
\nKen, if anyone wants it, they just have got to go to the Chan and Naylor site, which you can do, of course, straight off RET. Just go to the Real Estate Talk website, click on the Chan and Naylor button, and you\u2019ll find it in there.
\nChris, I want to thank you for that question. It is a good question, as nearly all of them are, I have to say. Of course, we do get a lot, and you can send them in through the website, or directly to me, kevin@realestatetalk.com.au<\/a>. Chris, we\u2019re going to reward you for that by giving you a 12-month subscription to Australian Property Investor<\/i> magazine. Don\u2019t worry, if you\u2019re already a subscriber; your existing subscription will be extended by 12 months. That\u2019s our way of saying thank you, Chris.
\nI want to say thank you to you, Ken. I know you already have a subscription to API; I can\u2019t give you one, but I\u2019ll just say thank you.
\nKen: \u00a0 <\/b>No, it\u2019s a pleasure.
\nKevin:\u00a0 <\/b>Good on you, mate. Ken Raiss, of course, from Chan & Naylor. Ken, we\u2019ll talk to you again real soon. Thanks, mate.
\nKen: \u00a0 <\/b>Thank you.<\/p>\n","protected":false},"excerpt":{"rendered":"