HI Guys, very new to this but am looking to jump into some investments and want to make sure I have the best way of structuring. I have a SMSF with one commercial property in it. Do you think it is best to keep buying in the SMSF or structure a different way ie. personal name, property trust etc etc ??
I would appreciate your thoughts as I presume many of you with more experience have been through this sort of thing ?
Thank you
Hey @rockypinball I would look to exhaust borrowing in personal names / trusts and then once you hit the borrowing ceiling look to continue investing with your SMSF.
This is not advice as I dont know your whole situation.
Colin Rice | CDR Finance
http://cdrfinance.com.au/
Email Me | Phone MePerth Based Mortgage Broker - Investment Property Finance Specialist | E: [email protected]
Thanks for this Colin,
could you perhaps list a few of the reasons why you would suggest this ??
Rocky
I don’t think anyone could answer your questions without a detailed analysis of your objectives, current super balance and investment strategy. If investing in Super – this will be Financial advice. In saying that, an analysis of your current assets and liabilities outside super as well as your borrowing capacity inside super – for instance is your current property leveraged? lots of pieces to the puzzle.
Cheers Ivan
Redwood | REDWOOD | SMSF | PROPERTY | FINANCE
http://redwoodadvisory.com.au
Email Me | Phone MeSMSF - PROPERTY INVESTMENT - WEALTH CREATION AND FINANCE SOLUTIONS
I know there is a lot to everything but was just looking for some ideas from other investors really on what they have done.
No leverage from the property in the super fund. It is completely owned and the next will be bought with cash as well.
You should get some legal advice as there are many ways to structure this both inside super and outside. It might be advantageous to set up a second SMSF for example.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
@rocky, obviously smsf has its advantages especially if you’re close to retirement or can access via transition to retirement. Its one way of keeping access to higher returns in a long retirement paying low tax. Issues may arise in later years when you’re subject to larger compulsory drawings and you may need to sell.
Tax and legal advice should be sought.
Scott has touched on an important point that a lot of investors who want to buy property in their SMSF don’t factor in/don’t realise they need to factor in – that when they retire there are minimum draw down requirements which get increasingly higher the older you reach. What this effectively means that unless you keep a reasonable portion of your SMSF in liquid assets, you can be forced to sell your properties to meet this requirement during your retirement.
With careful structuring from your financial adviser you can manage this requirement so you don’t have to be forced to sell what may be a great asset or something that you want to be passed down to the next generation.
This is an area we work with clients often, to ensure their retirements meet their long term plans, rather than get unwanted surprises.
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This reply was modified 7 years, 5 months ago by
Corey Batt.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
Scott & Corey – can you please expand on “compulsory drawings”. What would happen if you don’t spend as much as somebody else wants you too?
Andrew Pitt
Enhancing Commercial Property to Empower Business
Scott & Corey – can you please expand on “compulsory drawings”. What would happen if you don’t spend as much as somebody else wants you too?
https://www.superguide.com.au/smsfs/smsf-pensions-if-dont-withdraw-annual-minimum-pension-payment
This article explains it fairly well – there can be major tax implications.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
Thank you Corey. Yes, I would agree – that ruling has major implications for property held in a SMSF. Rethink of strategy even. thank you for sharing.
Andrew Pitt
Enhancing Commercial Property to Empower Business
Thanks Corey. Sounds like a deal breaker for long term hold I reckon.
hey Pitty, are you the guy that surfs?Thanks Corey. Sounds like a deal breaker for long term hold I reckon.hey Pitty, are you the guy that surfs?
It doesn’t necessarily have to be. By diversified mix of assets by the time you can retire, you could potentially just draw from the liquid assets within your fund (shares, cash etc), whilst holding the property indefinitely. A number of the SMSF lenders now require you to hold a % amount of your assets in liquid funds – ie shares or cash when applying for the loan which would help in this scenario, likewise over time as you grow your total funds.
But definitely you want to factor in how your SMSF will look over the long term – having just the single asset could lead to being forced to sell/other outcomes.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
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This reply was modified 7 years, 5 months ago by
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