A flexible structure widely used for family and long-term investment planning.

A Discretionary Trust, often referred to as a Family Trust, is one of the most common trust structures used in property investment. In this structure, a trustee manages the trust and has the flexibility to distribute income among beneficiaries based on financial needs or tax considerations. This flexibility makes discretionary trusts attractive for families and investors planning long-term property portfolios.

For lending purposes, trustees and key stakeholders usually provide guarantees, and lenders assess their income when evaluating loan servicing capacity. The property is owned by the trustee on behalf of the trust, while beneficiaries receive the income generated from the investment.

Using a corporate trustee is often preferred as it can provide greater administrative clarity and flexibility when managing assets. While some lenders may charge slightly different rates for trust loans, working with the right lender can help secure competitive terms similar to individual borrowing.

Discretionary trusts are especially useful for investors seeking asset protection, tax planning flexibility, and long-term wealth management.

A structured investment model designed for shared ownership and joint ventures.

A Unit Trust is commonly used when multiple investors participate in a property investment together. In this structure, ownership of the trust is divided into units, similar to shares in a company. Each investor holds a specific number of units that determine their share of income and capital gains from the investment.

This structure is often used in joint venture property projects because it clearly defines ownership proportions and profit distribution. Unlike discretionary trusts, the trustee has limited discretion over income distribution, as profits are distributed based on the number of units held.

Unit trusts can also provide tax advantages in certain cases, particularly where individuals hold units and can benefit from capital gains concessions. However, they are generally less flexible than discretionary trusts and require careful planning when setting up the structure.

While the lending process for unit trusts is similar to discretionary trusts, lenders will still assess the financial capacity of the investors involved. This structure is typically chosen for shared property investments, development projects, or partnership-based ventures.

A combination structure designed to blend flexibility with fixed ownership.

Hybrid trusts combine elements of both discretionary trusts and unit trusts. They are designed to offer the flexibility of discretionary income distribution while also allowing certain investors to hold fixed entitlements through units.

In theory, hybrid trusts provide investors with a balance between control and structured ownership. However, from a lending perspective, they are less commonly supported by major lenders due to their complexity. As a result, financing options for hybrid trust structures may be more limited.

Because of these lending limitations, hybrid trusts are usually recommended only in specific investment scenarios where the benefits outweigh the additional complexity. Investors considering this structure should carefully review their long-term strategy and seek professional financial advice before proceeding.

While hybrid trusts can work well in certain investment arrangements, discretionary or unit trusts are typically more widely accepted and easier to finance. Choosing the right structure depends on investment goals, financing needs, and long-term asset planning.