Young broker says trust lending can unlock millions for Australian property investors — with risks

A 28-year‑old Australian mortgage broker says many investors who stop at three or four properties could be forgoing millions of dollars in potential wealth, and he urged buyers to consider trust lending as a way to extend borrowing capacity — while stressing the approach carries material risks.

Bill Childs, who told the Daily Mail he owns eight properties, said placing investments inside a trust can keep debt out of an individual's personal name and allow banks to exclude that trust debt when assessing fresh lending if the trust is profitable.

"It doesn't suit everyone because realistically you don't need 10 properties to make money and retire. But there are a lot of people that work very hard, enjoy buying properties and want to keep going," Childs said. He said investors who register properties in their personal name often "cap out on an average income at the three to four property mark."

Childs explained that if a trust holds existing properties and shows profit, an accountant can provide a letter confirming that profitability. In that case, he said, the bank will assess personal liabilities and personal debt, then stop short of including the trust's existing debts in its calculations for a new loan. "If you have $3 million dollars worth of debt inside the trust, and that trust is profitable, when you go to the bank for a loan for a new property, the bank will exclude that existing $3 million debt," he said. Buyers with properties already in a trust can set up a new entity or buy in their personal name for subsequent purchases "as if they have zero dollars debt," he added.

Childs stressed that trust lending has become more mainstream over the past two years but cautioned it is being overleveraged by some professionals in the property industry and "can be dangerous if they do it the wrong way." He said the strategy requires careful planning and professional advice from accountants and lenders.

He also warned against expecting immediate positive cash flow. "Investment properties aren't profitable at the moment when you first buy them because interest rates are high and returns aren't that great," Childs said. "But over time, they do become positive as the rent rises and as your rates and loans reduce." The accountancy confirmation of a profitable trust, he said, is a common trigger for lenders to treat trust debt differently when considering further borrowing.

Childs's own pathway began when he bought his first property in Tamworth at age 21 after borrowing about $400,000 while working as a beekeeper on an annual income of roughly $60,000. He said his decision to save and invest rather than spend on consumer items followed advice from his father.

He also reiterated three personal rules he has shared publicly for selecting properties: avoid buying brand new dwellings, avoid off-the-plan apartments and avoid apartments in high‑rise buildings. "You want to buy with the value in the land not the building. The ugly duckling performs better," he said.

Industry commentators and lenders say a variety of structures, including family trusts and corporate entities, are already used by property investors to manage tax, liability and lending outcomes. Lenders' treatment of trust-held assets and liabilities varies, and banks continue to undertake assessments of personal serviceability, existing personal debts and the cash flow of the property being purchased.

Regulators and financial advisers routinely caution that leveraging strategies to accelerate portfolio growth increase exposure to market fluctuations and interest-rate changes. Childs acknowledged the limits of the approach, saying it "sounds crazy" to some, and reiterated that it is not appropriate for all investors.

As property markets and interest-rate environments shift, prospective investors and brokers say they should seek tailored advice from accountants and mortgage specialists before restructuring holdings or pursuing trust-based lending strategies.