Ideally, you should set up a trust before choosing a property to buy. Then, instead of buying the house yourself, you lend the deposit money to the trust fund. The trust then makes the purchase using a mortgage. Banks will usually ask for you to be a guarantor for the funds.
How do you plan a trust fund?
There are just six steps to setting up a trust:
- Decide how you want to set up the trust.
- Create a trust document.
- Sign and notarize the agreement.
- Set up a trust bank account.
- Transfer assets into the trust.
- For other assets, designate the trust as beneficiary.
How does a Property Trust buy a property?
Investment properties are chosen by the fund manager and bought by the trust. The fund manager then manages the associated maintenance, administration and rent collection.
How are investment properties managed in a trust?
Throughout the life of the Trust, investors also receive income distributions that are paid at set intervals (e.g. monthly or quarterly). Investment properties are chosen by the fund manager and bought by the Trust. The fund manager then manages the associated maintenance, administration and rent collection.
Who is the manager of a Property Trust?
Property trusts are also commonly known as property funds or property syndicates. Investors buy ‘units’ in the trust which owns a property or properties, and is managed by a professional fund manager, like Trilogy. Investment properties are chosen by the fund manager and bought by the trust.
Can a CPF be used to purchase a property on trust?
CPF monies cannot be used for the purchase. Banks are also unlikely to extend a loan for the purchasing of property on trust. A caveat can also be lodged on the child’s behalf to protect the property. This article provides only a general guide on the topic.
