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Offline looney


  • Joined: Mar 2007

  • Drives: VW Beetle
Hey guys,

I figured i'd throw out a request for direction/help as I'm sure some of you have probably got experience with this.

my Super fund is not really doing great shakes, its only got about $200k in it at the age of 35 :( so I figured it's time to maybe kick it up a notch. Although rental properties don't traditionally make the same returns as shares or resources, especially if managed, however i think there is great benefit as I can borrow 70% of the value of a property, in turn increasing the capital base of the fund.

anyway, I'm wanting to set up my SMSF so that i can pounce on the next good deal I see, and wonder if anyone has done this? and if so can you provide me some input as to the most economical way to set this up?

Cheers

Looney



Offline TomE


  • Joined: Aug 2010

  • Location: ADL
Hey guys,

anyway, I'm wanting to set up my SMSF so that i can pounce on the next good deal I see, and wonder if anyone has done this? and if so can you provide me some input as to the most economical way to set this up?

Cheers

Looney

Costs (estimated):

Financial Planning Statement of Advice $3,500 (Mandatory for most bank loans)
SMSF set up and Property Bare Trust $1800
Bank estab fee $1500
Banks use external lawyers for certification and  documentation $1,430 (Discounted if yo get their lawyers to set it all up)
Normal government purchase costs applies

Upfront costs are not cheap but factor in 35 years + benefits.

LVR up to 80% if the SMSF trustee is a company

No redraw on loans or using equity for other lending so your money is locked away in property.

This market is exploding in the eastern states with brokers/developer/lawyers working as groups. 90% of people are buying in newly developed areas

I am not a Financial Planner and this information is not advice.  :p
"There's too many self-Indulgent wieners in this city with too much bloody money! Now, if I was driving a 1967 275 GTB four-cam... "



Offline jim501

  • Idiot Seeking Village

  • Joined: Apr 2006

  • Location: Brisbane
  • Name: Cam
DB who used to own SCARY is is that line. Thesuperoffice.com.au



Offline 360c

  • 300kph+ club
  • Drug Dealer

  • Joined: Apr 2006

  • Drives: Purple People Eater
Hey guys,

I figured i'd throw out a request for direction/help as I'm sure some of you have probably got experience with this.

my Super fund is not really doing great shakes, its only got about $200k in it at the age of 35 :( so I figured it's time to maybe kick it up a notch. Although rental properties don't traditionally make the same returns as shares or resources, especially if managed, however i think there is great benefit as I can borrow 70% of the value of a property, in turn increasing the capital base of the fund.

anyway, I'm wanting to set up my SMSF so that i can pounce on the next good deal I see, and wonder if anyone has done this? and if so can you provide me some input as to the most economical way to set this up?

Cheers

Looney

I've recently done this; but before I impart my hard won experience, have you already got a SMSF or you are wanting to set one up and then use the balance to buy the property?



Online Fil-Ski


  • Joined: Feb 2009

  • Drives: 993TT
  • Location: Adelaide
The advantages of super are deteriorating every year. Contribution limits have put a major dent on SMSF effectiveness. Since you are relatively young I would consider a few risks before putting additional money in super

The government will no doubt continue to increase the age that you can access your super ( you might be dead before you even see a cent)
They will increase the tax rate - how else are they going to fund the deficits
Contribution limits will change over the next 30years




Offline scud

  • 300kph+ club
  • Rocket man

  • Joined: Mar 2006

  • Location:
  • Drives:
The advantages of super are deteriorating every year. Contribution limits have put a major dent on SMSF effectiveness. Since you are relatively young I would consider a few risks before putting additional money in super

The government will no doubt continue to increase the age that you can access your super ( you might be dead before you even see a cent)
They will increase the tax rate - how else are they going to fund the deficits
Contribution limits will change over the next 30years
found out today I can go from $25k to $30k



Online Fil-Ski


  • Joined: Feb 2009

  • Drives: 993TT
  • Location: Adelaide
found out today I can go from $25k to $30k
That extra 5K will come in handy when you can finally access it in 2079. I'm sure by then the government has taxed about 99% if it as well.



Offline 360c

  • 300kph+ club
  • Drug Dealer

  • Joined: Apr 2006

  • Drives: Purple People Eater
found out today I can go from $25k to $30k

Concessional contribution limits are age dependent, you are talking the limit for a sub 49 year old there. The limits change next financial year and in your case increase from $25k to $30k. Over 49yrs old and you can contribute a $35k concessional contribution.

One should also not forget that you can make non-concessional contributions up to a limit (this year) of $150k in one year or up to $450k for 3 years. This increases next year to $180k from memory. That's for EACH fund member too, typically husband and wife in most SMSF's.

You can still put a shitload of money into a low taxed environment, even with todays more stringent rules.

One other factor that is often overlooked is the fact that the super fund is generally protected from creditors. Everyone is only a few poor decisions and some bad luck away from the streets………..

If you have poor impulse control and a tendency to spend rather than save, it's also handy that you can't get hold of the money until you retire. Well in theory anyway as there are ways for those with a SMSF prepared to push the envelope. However the penalties are potentially HUGE.

I started my SMSF when I was about 30 years old. At the time I wasn't that keen on locking my money away for decades in an environment where the rules changed at Government whim. However it made me save and has served me very well over the last couple of decades. If the shit hit the fan and I lost everything outside the SMSF, I would still have a very comfortable retirement as a result of the decision made when I was 30 years old.



Offline looney


  • Joined: Mar 2007

  • Drives: VW Beetle
I've recently done this; but before I impart my hard won experience, have you already got a SMSF or you are wanting to set one up and then use the balance to buy the property?

Thanks for asking Scott. I do not have a SMSF.

The intention is to set one up, transfer $100k out of my existing super into it to allow the purchase of 1 simple investment property at the 70-80% LVR.   Basically just trying to leverage it a bit.



Offline amgsl55

  • Tooth hurty

  • Joined: Feb 2011

  • Location: Adelaide
At the time I wasn't that keen on locking my money away for decades in an environment where the rules changed at Government whim.

IMHO one should be able to assume that the even with changing rules, the government will never make super taxed at a higher rate than your maximum tax rate.  In the meantime, it really is the best investment vehicle however it's absolute value is limited because of the limits in contributions.



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