[Benjamin CsikosParticipant@benjamin-csikosJoin Date: 2010Post Count: 114]

February 19, 2010 - 5:16 am

I feel like a broken record.

Got anything in your super?

[Benjamin CsikosParticipant@benjamin-csikosJoin Date: 2010Post Count: 114]

February 18, 2010 - 4:08 am

Wow. Pretty rough outlook WJ Hooker!

But something just doesn't add up.  If you're so sure that property investment is about to dissintegrate, what brings you to a property investing website?

Easy, stimpy. Easy boy.
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[Benjamin CsikosParticipant@benjamin-csikosJoin Date: 2010Post Count: 114]

February 18, 2010 - 2:04 am

Yep, You're right on all counts Dan.

The ongoing costs of audits etc do fluctuate, depending on how complex your super fund becomes. If you're going to do stocks and shares, theres a lot more detail in there as you have to record every trade, and there can be hundreds of them in a year!  If you're only going to do property, (and most people do do only property if they're doing property, because property requires a large chunk of money being tied up for some time) then the bookkeeping is a lot simpler, and therefore cheaper for an accountant to do it.

The bonus with doing it through people like the guys I work for is, they set people up with their super as cheaply as they can, and have the ongoings as cheaply as they can using in-house accountants that can look after things for people, because it's a drawcard for where they can really make the money, and that's through the purchasing of the property itself.   If people get educated on how to use their super, suddenly you have a whole bunch of new investors that suddenly CAN afford to buy a property, and want to, and because they were so happy with how well they've been treated, and how cheaply they got things done for with their super, that the relationship is already there, and they're happy to look at the guys next doors property first, before they go somewhere else.  Super Self managed are there specifically to create a market of investors that previously didnt exist.  The customers love it, cuz it's all done cheap, and Coldwell Banker love it, because now people are in a position to buy something through them.

And yes, when it comes to buying through your super, you don't have to just buy through your super. Often people will come to us to buy a single property through their super, but then turn around and also buy another 2 or three properties from coldwell banker next door aswell. 

Works well, dunnit.

[Benjamin CsikosParticipant@benjamin-csikosJoin Date: 2010Post Count: 114]

February 18, 2010 - 12:58 am

Well, I'm going to the brisbane session.  See you guys there.

[Benjamin CsikosParticipant@benjamin-csikosJoin Date: 2010Post Count: 114]

February 18, 2010 - 12:54 am

Hey, why not.  I'd use it.

Just cuz people are selling something doesn't mean they're not useful.

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February 18, 2010 - 12:22 am

To quote dan

"One – set up costs are expensive, as are ongoing accountant / auditor fees.
Two – can't use one property to leverage another.
Three – current ambiguity in rules as to whether CGT is payable once loan is paid out, on transfer from bare trust to SMSF."

You might be pleasantly surprised by a solution to each problem.

One. Set up costs are the same or less than what most people pay in fees to a managed fund already. It costs approximately a grand to set up a SMSF, which is paid by the fund itself,  and about a grand to pay for an accountant to look after it once a year., (depends on the accountant).   5 billion a year is paid by australians in superfund fees (That's a LOT.) The average cost you pay in managed funds is about 2 percent of whatever is in there. At 100k, thats 2 grand.   So at worst, you're going to break even. SMSF's costs you no more than you're already wasting in fees. It's just a change in ownership, like opening a different bank account.

Two. Can't use one property to leverage another?  So you're saying that because you can't triple your super's power TWICE, that it's not worth tripling it once?  "If I turn my 100 grand into 250, but i'm not allowed to turn my 250 into 625, then I should just stay with the 100 to begin with."   150 grand more in super for a few measly phone calls? Come on, man!

Three.  Even if you had to pay capital gains tax on it when you retire (when you don't) it's still better to start with 400 grand and double it, MINUS all those 'costs' that you're worried about being there, than starting with 100 grand and doubling it, and not having any costs.

Essentially, if you've got a hundred grand sitting there, there's no good reason to let it sit there doing nothing. It's just stagnant money that is being eaten away by fees and inflation, and if you were thinking it would make a healthy retirement, think again.  Leverage it, invest it, and grow it.  It doesn't cost anything more than you're already spending in fees, all it costs you is a bit of education and a few phone calls.

The only reason why one wouldn't use their super to invest in property is because they're already good at investing in stocks or shares, and they enjoy that more than property. But you wouldn't be here if that was you.

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February 17, 2010 - 5:02 am

No objections?

I was given this idea from a work colleague. I wanted to test it against the critics.

Essentially, if noone disagrees then that sounds like a green light to anyone that has 100k of super. Come see me and let's get it done.

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February 16, 2010 - 2:17 am

Ha!  Now there's a can of worms.

Where do you think the money goes once you've put it into the collection plate?

Do you think it's charity?  perhaps a little.  Missions? Sure, a little there too. Staff wages? yep, a bit of that.

But you know where most of it ends up?

Paying off the building that you're sitting in.  You're essentially paying for the rent of your seat.

What…a waste….of money.

See, church buildings are one of the worst 'investments' I can think of.   Churches pay through the nose to own large auditoriums. They don't rent the building out to others throughout the week, and they never sell it!  So they can't make a cashflow positive investment through the rent, and the capital gains means absolutely nothing because it's never sold! Instead, churches fork out thousands and thousands…and THOUSANDS of dollars for the upkeep of a building that they use for approximately 4 hours a week.  If they merely sold the money trap that is their building, and rented a place for a few hundred bucks a week,  your tithes and offerings could be used for something a little more worthwhile, rather than just paying for the comfort of four walls you can call your 'own.'

Forget the building. Meet in a cafe, at home, in a park, rent a spot, or anywhere else you can think of.

I thought christians were supposed to be good stewards with their money.

[Benjamin CsikosParticipant@benjamin-csikosJoin Date: 2010Post Count: 114]

February 16, 2010 - 12:00 am

and then there's rent!

Essentially I guess the expectation for retired people is this… sell your house that you have worked most of your life to pay off, and then rent and live off the money you have made from it. 

Not my cuppa tea.  I want to leave a legacy behind for my children, not blow their inheritance because I was too scared or lazy to 'have a go' earlier in life.

No regrets.

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February 15, 2010 - 11:48 pm

Wow. Look at em all come out of the woodwork the moment you say you have money to spend.

I live in carindale. Work in west end. I'm 26.

I could give you a hand if you wanted, but it looks like you'll have more help than you need.

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February 15, 2010 - 11:15 pm

Spot on JacM.  You're right,  people simply cannot afford NOT to take control of their finances and start investing.

When it comes to retirement,  have a look at a few interesting tidbits of information.

This is why we're screwed if we sit on our hands.

in 1936, 17 tax payers in australia looked after 1 retiree with their taxes etc.

in 2020 – it is expected that 4 tax payers are expected to look after 1 retiree.   Think they'll be able to do it?

More than 70% of australians retire at age 65 on an average income of $300 GROSS per week or less.

What sort of lifestyle does that give you?

Most people that have done nothing to invest in assets wind up living a very poor lifestyle when it comes time to retire. Struggle struggle struggle.  And as more people retire, leaving the strain on the next generation to look after them, it is only going to get worse and worse. 

Put it into perspective, how much money do you think you'll have in your super when you retire? 100k? 200k? 

How long were you planning on living? 20 years? That means you'll only get 10 grand a year to survive on. What if you spend more? Pretty soon, you'll either have to go back to work just to survive, or starve. What if your body starts falling apart on you? What if you can't work? 

The time to act is now. The time to do something is now.  Standing still in fear of making a mistake is not going to lower the risk for you, it's simply going to guarantee it.

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February 15, 2010 - 5:08 am

shahabr,

There is a difference between setting up a SMSF and using it to buy property.

It's relatively easy to set up a self managed superfund, there are countless places that will do it for you.  To go through the guys
I work for, they do it for a little less than a grand.   The thing is, that's not the expensive part. The expensive part is organising the accountants and buying the papertrail to make it possible to buy property and do it right. That's the part that costs the extra 4-5 grand (they give discounts if you buy a property through their affiliated partners.)  Self managed super is easy,  using super to buy property, not so easy. It can be challenging finding the right people who even have the know-how that can do it for you. It can also be hard to find someone that won't simply try and talk you out of it and into something else that is more profitable for them if you do it.  See, there's advice, and there's advice.  Most financial planners have an agenda of their own to push. They won't make a lot of money from you if you buy property, but putting it into shares and stocks however, is much more valuable to them.

I'm not saying that shares or stocks are a bad idea, for the record. It's just that if you want to buy property, it's better to talk to people that are pro-property to begin with.

That's the difference.

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February 12, 2010 - 1:07 am

It's a lot easier to hire and fire a property manager than it is to allow in, and then kick out, a tenant.

Just choose your property manager wisely. Get referrals if you must.

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February 12, 2010 - 12:53 am

Allow me to stand before you and scream at the top of my lungs for a moment.

I KNOW WHERE TO FIND CASHFLOW POSITIVE PROPERTIES! Is noone paying attention to me? Am I invisible? Wait… let me just check my breath on a window… am I dead and I just don't know it?  Let me try again. I KNOW WHERE TO FIND CASHFLOW POSITIVE PROPERTIES!!!!

Let me just give you a background on me for a second here people.

I agree with andrier.  I read Steve's book, was crazy inspired to go and buy hundreds and hundreds of cashflow positive properties, and then realised, crap… where are they?

I figured out pretty fast that If such a bargain existed, by the time it filtered through the real estate agents friends, family and inner circle business associates, I would never even SEE such a bargain. It would have been bought the day it was put up for sale by someone that was close to the agent.  So I have taken the initiative.

I have very little interest in selling real estate, I have a lot of interest in buying it. If I want to buy the good stuff, then I have to be IN with the real estate agents. What a better way to do it, than to become one. I recently have taken a course, planted myself in a job and have started operating, as close as one could call it, to a buyers agent.

I specialise in educating people how to use their super to buy property, but then once that is set up, I also specialise in finding them a property that is suitable for them. When buying through super, it's not a viable option, and the banks don't want to play with you, UNLESS YOU FIND SOMETHING CASHFLOW POSITIVE.   So it's my job to make sure I know where they are, and how to find them!

So, Andrier, if you were looking for "a real estate agent to eat out of your hand like a little b*tch", as you put it. Well… allow me to offer my services. If you think you're a cashcow that is serious about buying property, then bend me over and call me spanky. Let's talk. I can only afford so many deals at a time, I can't buy them all.

Two words. Dual Occupancy.

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February 12, 2010 - 12:30 am

150k is a bit high. I would say the minimum is 100k.  It really does depend on who you're going with because, as its a relatively new concept, it is wrought with the ability for people to charge ridiculous amounts to set it up. Literally as high as 30k margins!! When you're dealing with a group that does it for pretty close to cost price, specifically because they know it's a good relationship builder and opens them up to new business in property, you don't need to start with so much.

http://www.superselfmanaged.com.au

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February 11, 2010 - 11:24 pm

Brilliant, thankyou.

I don't plan on selling the house, merely getting it valued at a decent rate so that I can use the equity to go again. It's a cashflow positive money spinner.   I already have equity in it as my deposit was 40 percent, because given my financial situation they didn't want to lend me any more than that! So I've already paid half of it off, on the lookout for another dual occupancy home.

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February 11, 2010 - 11:20 pm

Hmmm…. depends. There's a couple things you could consider.  If you have a partner with more super you can pool your supers together. In fact, 4 people are allowed to go in together with their supers to buy a property. The alternative is to buy something small. Because the banks expect you to cough up a third deposit, it means you'd only be able to buy something worth 90 grand. It's pretty small. Not to mention, it costs about 6 thousand from your super to get completely set up from woe to go, organising a smsf, to buying the property, so it becomes better value the more money you start with. 

I still believe SMSF are better than leaving them there for someone else to look after. Save on fees, and you have access to money that you can play with to learn how to invest that you normally didn't. That 30 grand could be a very handy educational tool.

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February 11, 2010 - 5:15 am

Yeah, I reckon having it managed is pretty good value. Far less stress. If passive income is the overall plan than it's not passive if you have essentially just created another job for yourself as a property manager. 

[Benjamin CsikosParticipant@benjamin-csikosJoin Date: 2010Post Count: 114]

February 11, 2010 - 5:06 am

Hey Shahabr,

That's my area of expertise as I work at a company that sets up Self Managed Super Funds for people that are specifically interested in property. Feel free to take a look at this previous conversation I had on the topic. I think it's a pretty fair view of the pros and cons to buying property through super.

https://www.propertyinvesting.com/forums/property-investing/general-property/4330763

If you want to know more personally… send me an email and we can chat. It's getting more and more popular by the day.  Over 3000 SMSF's are being set up in Australia per month.

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February 10, 2010 - 6:14 am

ebay it is! time to go shopping