Property investing isn’t just about picking the right suburb or waiting for prices to rise.
What often separates successful investors from those who stop at one or two properties is how they structure their finance. Borrowing capacity is one of the biggest barriers to building a strong portfolio, and the way you own your properties has a direct impact on how much you can borrow.
This article breaks down how experienced investors use trust structures to protect their borrowing power and continue growing their portfolio. From how lenders assess loans in different names, to strategies like debt recycling and cash flow top-ups, we’ll explore practical ways investors are using structure to stay ahead.
Whether you’re just getting started or ready to scale beyond your second or third property, understanding these tools can give you more options and better results.
At AbodeFinder, we work with buyers who want to grow their wealth with a smarter strategy. If you’re ready to take the next step, we’re here to help you find the right structure and the right property.
Why Borrowing Power Limits Stop Most Investors
Most investors run out of borrowing capacity far earlier than expected, often after purchasing just one or two properties. The problem isn’t always the property itself, but how the loans are structured and assessed by lenders.
Lenders look at your full financial picture when deciding how much you can borrow, including:
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Your personal income
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Existing debts and repayments
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How each property in your portfolio performs
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Whether properties are owned personally or through another structure
As you add more properties, your ability to service new debt decreases unless your income rises or your expenses drop. Even if your properties are growing in value, lenders may not recognise enough of that growth to justify a new loan.
That’s why experienced investors turn to better finance structures to keep progressing.
Using tools like trust structures, offset strategies, and debt recycling, they find ways to segment their loans and prevent one property from limiting access to the next. This approach helps maintain momentum and unlock more borrowing power over time.
At AbodeFinder, we help you match your finance plan with property opportunities in high-performing suburbs. If you’ve reached a wall with your borrowing, there’s likely a way through, with the right strategy.
How Trust Structures Help You Borrow More
Finance structure isn’t just about reducing tax or asset protection; it can also be a tool to increase borrowing capacity and keep your investment plans moving forward. One of the most effective tools advanced investors use is the trust structure.
Individual vs Trust Lending
When you buy property in your own name, all the debt and rental income appear on your personal credit file. That means every loan counts toward your borrowing limit, even if the property is positively geared or performing well.
Trusts change the way lenders assess your position.
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When property is held in a trust, the loan may be viewed as separate from your personal file (depending on the lender).
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Rental income and debt sit within the trust, which can sometimes be evaluated on its own performance.
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This reduces the chance of one property holding back your ability to buy the next one.
The end result: more flexibility, and often, more borrowing power when structured correctly.
Setting Up Multiple Trusts
Some investors take this strategy further by creating a separate trust for each property, or for different segments of their portfolio. These might be:
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Discretionary trusts (also called family trusts)
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Unit trusts, often used in partnerships or when specific ownership shares are needed
This separation means:
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Each trust’s loan can be assessed independently
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Debt from one trust usually doesn’t affect another
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Lenders may ignore or reduce the weight of existing trust loans when assessing new applications
This approach avoids debt overlap, improves serviceability, and helps investors qualify for more loans, even as their portfolio grows.
At AbodeFinder, we work closely with clients’ accountants and brokers to ensure property strategy and finance structure align. If you’re looking to grow your portfolio without hitting a wall, this might be the next step to explore.
Boosting Serviceability with Smart Debt Strategy
Lenders don’t just look at how much you earn, they focus on how much of your income is left after all your repayments. This is where serviceability becomes the key to unlocking your next property loan.
Smart investors use two core strategies to improve their serviceability profile and make themselves more appealing to lenders.
Cash Flow Top-Ups
When properties are held in a trust, lenders often assess the trust’s income and expenses independently. If the rental income from the trust doesn’t meet their serviceability standards, it might limit how much you can borrow.
But there’s a simple workaround:
• Investors can top up the trust’s income using their PAYG salary
• This is similar to how people contribute extra money to their SMSF to meet loan obligations
By voluntarily helping the trust meet repayments, you give lenders more confidence which could open the door to a larger loan or better terms.
Debt Recycling to Free Up Capacity
Another useful tactic is debt recycling; a strategy that improves how your personal balance sheet looks to lenders:
• You make extra repayments on your personal (non-deductible) debt
• Later, you redraw that amount for investment use, such as a deposit or renovation
This does two things:
• It shifts debt from personal (non-tax-deductible) to investment (tax-deductible)
• It shows lenders you’re in control of your finances and actively improving your position
By applying these strategies consistently, investors can build a stronger lending profile and maintain momentum across multiple purchases.
At AbodeFinder, we help buyers plan ahead from picking the right suburb to understanding how their finance structure can affect what’s possible.
Case-Based Examples of Strategic Structuring
Understanding how trust structures work in real scenarios can show their value more clearly. Below are two simplified examples of how experienced investors use trusts to build momentum and expand their portfolio.
Example 1: Releasing Equity Through Trust A
An investor sets up Trust A and purchases a property in Perth, targeting an area with growth potential. The property increases in value by $150,000 within three months due to smart buying and market movement.
• The trust refinances the property to release equity
• Funds are accessed without disrupting the investor’s personal lending profile
• No impact on other properties or loans outside of Trust A
This gives the investor more flexibility to act quickly when the next opportunity appears.
Example 2: Funding Next Purchase with Trust B
The equity released from Trust A is recycled and used to fund a second property purchase; this time through Trust B.
• Trust B is set up as a separate entity with its own loan and rental income
• The loan is not cross-collateralised with Trust A’s property
• Lenders can assess Trust B’s serviceability on its own, extending borrowing options
Each trust acts like a separate container, isolating risk and helping the investor avoid common finance hurdles.
By separating loans, income, and ownership, the investor creates a clear pathway for portfolio growth, without running into serviceability walls too soon.
At AbodeFinder, we support investors who want to structure their portfolio in a smarter, more scalable way. Whether you’re starting fresh or reworking your finance plan, we can help you align strategy with opportunity.
Risks, Costs, and Considerations
While trust structures can offer flexibility and open up lending options, they’re not the right fit for every investor. Understanding the trade-offs can help you decide whether this approach suits your goals.
Land Tax
• When you buy property in your personal name, most states offer higher land tax thresholds
• Trust ownership may attract lower thresholds or no exemptions in some states
• This can lead to higher annual land tax bills, especially if your portfolio grows quickly
• Always check the current state-based rules before committing
Costs
• Setting up a trust usually involves legal fees and accounting support
• You may need to establish a corporate trustee, adding to setup costs
• Ongoing tax filings and financial statements are often required, even if no income is earned
While these costs are manageable for many investors, they need to be factored into your long-term planning.
Negative Gearing
• In some trust structures, negative gearing benefits don’t flow through to the individual
• If the trust makes a loss, you might not be able to offset that against your personal income
• This reduces short-term tax advantages; though capital growth and income strategy can still make it worthwhile
Expert Help Needed
• Trusts are technical; this isn’t something to DIY
• You’ll need a property-focused accountant to help design the right structure
• A mortgage broker familiar with trust lending is also key to making the numbers work with the banks
At AbodeFinder, we work alongside trusted finance and legal professionals to make sure your property journey is backed by a strong structure and smart strategy.
What You Need to Make It Work
Trust structures aren’t just about paperwork, they need to sit within a clear, long-term investment plan. Here’s what successful investors put in place to make this strategy effective.
A Clear Multi-Property Plan
You’ll need a well-defined path for where you’re heading:
• How many properties do you want to own?
• What cash flow or capital growth do you need at each stage?
• Which trust structure will support each phase of your strategy?
Without a plan, even the best structure can fall short.
A Trusted Broker and Accountant
Not all professionals are across trust lending or tax rules. That’s why it’s essential to work with:
• A mortgage broker who understands how different banks assess trust loans
• An accountant who can guide you on setup, compliance, and the most suitable trust type for your goals
Understanding the Rules
You don’t need to be an expert; but you do need awareness of:
• State-based land tax thresholds
• How lenders treat income and risk in trusts
• When cross-collateralisation becomes a problem
Making decisions with the full picture helps avoid nasty surprises.
Property Selection Tools
Structure is only part of the story, you still need the right assets:
• Properties with strong rental yields to help meet serviceability
• Areas with upside potential, backed by data and strategy
• Filters to compare suburbs by price growth, vacancy rates, and rental demand
AbodeFinder uses AI-driven suburb analysis to help our clients find areas that align with their finance goals.
A Long-Term Mindset
This isn’t a get-rich-quick scheme. Trust structures are best suited for investors:
• Who plan to scale over time
• Who are happy to reinvest equity and refine their strategy
• Who are building a portfolio for income, growth, and flexibility
At AbodeFinder, we’re here to help you structure for success; whether you’re buying your first property or your fifth.
Conclusion
Using trusts and a tailored lending strategy gives serious investors more flexibility and borrowing power.
It’s not a hack, it’s a structure that works when done properly.
AbodeFinder helps investors plan ahead, assess lending structures, and find suburbs that match their finance and portfolio goals.
Ready to plan your next property move with the right structure?
Visit abodefinder.com.au to explore how we help smart investors scale faster.
