whats the deal with this? positives and negatives? and how much do you need to have in your super account to be able to make a start? if there are previous posts that explain this please send me a link
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.
had a read, seems like you need to have a good amount in there before you can think about investing….30k wont cut it
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.
shahabr wrote:had a read, seems like you need to have a good amount in there before you can think about investing….30k wont cut it
You are right. Expert estimates recommend that if you have less than $150k, an SMSF can be too costly, due to fees, audit costs, etc.
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.
id be looking at buying in regional for around the 80k mark with a decent return, so ill read up on it a bit and might send you an email next week
shahabr be careful as a lot of areas are not acceptable for SMSF lending especially some of the smaller regional areas.
Richard Taylor | Australia's leading private lender
Till I have 1/2 million in my super… otherwise stick with Industry super
cheap management fee with reasonable returni think more research is definately required. i did find esuperfund.com.au who do a free set up with an annual fee of $600, so i guess that is a pretty decent deal.
i would be looking at buying a house or unit in orange nsw and would have around $50k in total super between two people, probably looking at a place which would cost under $150k and potentially if i went with the unit option id be looking at around the 80k mark. the property currently gets a rent of $140pw so on the surface i cant why i shouldnt go with it, but thats why i need a little more research. do you think the bank would lend on somehting like that? and in the above scenario would it be worth going for it?
ben i know you are talking about a 5k setup fee, but what do you offer in addition to a business such as esuperfund?
Do normal lending conditions still apply in this scenario ie. minimum size 50 squares or above?
Does the credit history/borrowing power of the people who have pooled their super come into it at all?I have been advised previously that you require a 30% deposit to use super to get a mortgage.
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.
Hi Maree
Yes hate to say they certainly do in fact the criteria is even tighter than normal.
Richard Taylor | Australia's leading private lender
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