2019 Money Magnet Symposium - Discover how to make, and keep, more money and achieve a financially empowered future
Viewing 20 posts - 1 through 20 (of 20 total)
  • Profile photo of matthew harrismatthew harris
    Member
    @matthew-harris
    Join Date: 2011
    Post Count: 1

    Hi guys first time invester with no properties keen to get cracking taking a while to get deposit saved looking at buying through smsf have about 95,000 have been told thats not really enough have been speaking with coompany that tell me it can be done and been showed on paper how it can be done through lower set up fees and lower annual fees just wondering if anybody out there has bought through smsf and if there happy with the way its performing  and as to how much is enough money in tour super to get started thanks  Mat

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,173

    It may be able to be done, but as trustee of your smsf you would be not acting in the best interest of your fund by putting all of its cash into the one investment. Consider carefully if this is the case.

    It may also be possible to join with a spouse or others to pool your super money together. Many issues here to though.

    Terryw | Structuring Lawyers / Loan Structuring Pty Ltd
    http://propertytaxbook.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of Mick CMick C
    Participant
    @shape
    Join Date: 2010
    Post Count: 1,099

    With only $95,000 in SMSF, it may not be “financially worth it”…. the fees etc will eat up any returns you expect to achieve,

    Speak to a Financial adviser or do a bit more research; and you will find the running cost on a SMSF can be hefty for such a small amount.

    Regards
    Michael

    Mick C | Shape Home Loans
    http://www.shapehomeloans.com.au/
    Email Me | Phone Me

    Same Banks. Better Rates. Served With a Passion.

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,010

    Hate to disagree for once with Terry and Michael. 

    I dont think $95,000 is necessarily insufficient to start your own SMSF and in fact i have done a couple with a less. 

    All boils down to what you think you will invest in but assume it is say a $300,000 unit you could easily cover your 20% deposit, pay your acqusition costs, set up the Bare Trust and still have $10-$15000 sitting in a cash Term Deposit which you could add to by the rent and employee contributions.

    Got a couple going thru for forum members at the moment with a lesser balance than that.

    You just had to understand the Accounting and annual running costs v choice of investment and potential greater return.

    Cheers

    Yours in Finance

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me | Phone Me

    0-40 Properties in a decade with a unencumbered portfolio value in excess of $40M. Ask me for a copy of my API Interview.

    Profile photo of Mick CMick C
    Participant
    @shape
    Join Date: 2010
    Post Count: 1,099
    Qlds007 wrote:
    Hate to disagree for once with Terry and Michael.

    All good- that’s what a open forum is for- honest opinion and everyone have different experience even if it’s for a simliar story/subject- alwasy good to hear both sides…+ you def have a lot more exp then me Richard, so i always got my leaning hat on when i read your post :)

    Qlds007 wrote:
    >All boils down to what you think you will invest in but assume it is say a $300,000 unit you could easily cover your 20% deposit, pay your acqusition costs, set up the Bare Trust and still have $10-$15000 sitting in a cash Term Deposit which you could add to by the rent and employee contributions.

    Got a couple going thru for forum members at the moment with a lesser balance than that.

    You just had to understand the Accounting and annual running costs v choice of investment and potential greater return.

    Cheers

    Yours in Finance

    True, but original poster did mentioned it’s his/her first time investing- not sure if they have the exp to buy something that covers all the cost….they could.

    Regards
    Michael

    Mick C | Shape Home Loans
    http://www.shapehomeloans.com.au/
    Email Me | Phone Me

    Same Banks. Better Rates. Served With a Passion.

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,010

    Hi Michael

    Totally agree thats why i love this forum it is like open debate and you can learn so much from others.

    Guess my arguement was that if Matthew was with a Retail Fund and fed up of seeing his Superannaution go backwards month to month the amount he had to invest could be rolled over, With specialist advice he could dip his toe into acquiring an investment property and still be able to have the balance of funds in cash meaning with fairly limited risk he could diversify and still be moving forward towards creating a long term nest egg for himself.

    Cheers

    Yours in Finance

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me | Phone Me

    0-40 Properties in a decade with a unencumbered portfolio value in excess of $40M. Ask me for a copy of my API Interview.

    Profile photo of rudra_rrudra_r
    Participant
    @rudra_r
    Join Date: 2009
    Post Count: 61

    Hi Richard,

    Just out of curiosity what do you see as the minimum amount required to buy property via SMSF?

    Cheers
    Rudra Radasandaran

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,010

    Hi Rudra

    Course all depend on the property itself but based on the fact that you need a minimum 20% deposit plus acqusition costs I would probably say $65-$75,000.

    You however need to understand the Annual costs and reporting requirements and at that level probably are going to find a retail fund is slightly cheaper to run.

    Of course the big difference is that you dont have the same investment choice.

    I am in the process of writing an Ebook on SMSF and Financing property through them so shoot me an email and i will add you to the list of forum members who have asked me to send them a copy.

    Cheers

    Yours in Finance

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me | Phone Me

    0-40 Properties in a decade with a unencumbered portfolio value in excess of $40M. Ask me for a copy of my API Interview.

    Profile photo of Matt McLeanMatt McLean
    Participant
    @matt-mclean
    Join Date: 2008
    Post Count: 54

    Hi Richard,

    I'd love it if you could pop me on that list for your upcoming e-book as well if you don't mind!

    Cheers,

    Matt.

    Profile photo of rudra_rrudra_r
    Participant
    @rudra_r
    Join Date: 2009
    Post Count: 61

    Hi Richard,

    Thanks for that, looks like I’ll have to wait a little bit longer before I can go down that path unless I do voluntary contributions. Look forward to reading your e-book on the topic.

    Cheers
    Rudra

    Profile photo of Pete WargentPete Wargent
    Participant
    @pete-wargent
    Join Date: 2011
    Post Count: 3

    I'd say $95,000 probably is enough but you'll have to be prepared for the compliance/audit/tax fees that might prove a little bit painful. 

    Shop around for the best advisors you can find and don't be scared to negotiate on their annual fees. 

    PW

    http://petewargent.blogspot.com/

    Profile photo of PaulliePaullie
    Member
    @paullie
    Join Date: 2009
    Post Count: 217
    Terryw wrote:
    It may be able to be done, but as trustee of your smsf you would be not acting in the best interest of your fund by putting all of its cash into the one investment. Consider carefully if this is the case.

    It may also be possible to join with a spouse or others to pool your super money together. Many issues here to though.

    Hi Terry. Im interested in your second statement. Issues with pooling super.

    I literally just got back from my accountant about this and we are setting up a family super fund, which myself, wifey, and two brothers will be members of. We have a total of $230k.

    What kinds of issues may we run into?

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,173

    Death is the major one.

    Imagine you and wifey die and the two brothers take over. If you do not have a valid binding death benefit nomination then the trustee of the fund will decide (to an extent) on who to pay your death benefits to.

    Terryw | Structuring Lawyers / Loan Structuring Pty Ltd
    http://propertytaxbook.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of PaulliePaullie
    Member
    @paullie
    Join Date: 2009
    Post Count: 217

    Terry, I have no doubt at all, if that happened my brothers would nominate my children as beneficiaries.

    Anything else?

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,173

    Best to remove the discretion though.

    There are probably heaps more issues, but I cannot think at the moment. Oh, enduring powers of attorney is another. Imagine what would happen in one person were to be injured and in a coma. Another leaves australia for a year or so.

    Terryw | Structuring Lawyers / Loan Structuring Pty Ltd
    http://propertytaxbook.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of PaulliePaullie
    Member
    @paullie
    Join Date: 2009
    Post Count: 217

    To my understanding if a person stops contributing to the smsf then that simply dilutes their share in the portfolio, that right?

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,173

    Don't think that is how it works.

    Terryw | Structuring Lawyers / Loan Structuring Pty Ltd
    http://propertytaxbook.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of PaulliePaullie
    Member
    @paullie
    Join Date: 2009
    Post Count: 217

    It has to work in some way like that or no one would combine forces.

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,173

    Maybe you are correct. If one person were to stop contributing then their overall share of the SMSF would decrease as a percentage. But by combining forces this enables the fund to leverage and purchase some bigger assets like a property.

    I am not sure about voting rights – if a person's % decreases does their voting rights?? Probably not because all members would be trustees or directors of the trustee. But I haven't looked into this so may be incorrect.

    Terryw | Structuring Lawyers / Loan Structuring Pty Ltd
    http://propertytaxbook.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,010

    Hi Paullie

    Yes when one member ceases contributing then their share of the overall fund is adjusted.

    This is the same when the fund is formed. Assume husband rolls over 70K and wife 30K then future growth is apportioned accordingly. This is then adjusted each and every year depending on the individual contributions made by each member over that year.

    Cheers

    Yours in Finance

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me | Phone Me

    0-40 Properties in a decade with a unencumbered portfolio value in excess of $40M. Ask me for a copy of my API Interview.

Viewing 20 posts - 1 through 20 (of 20 total)

You must be logged in to reply to this topic.