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.
Ok, first up SMSF's cost a bit to set up and have significant annual running costs so you need a fair bit of money in them to make it worthwhile. You are probably a bit light on in funds; but for the reasons I mentioned earlier plus your young age I would still have my own SMSF and aim to build it up as fast as possible. There are also very strict and onerous regulations governing SMSF's and the Trustee. The penalties for getting it wrong can be huge and catastrophic, so setting one up and taking on the role of Trustee shouldn't be taken lightly. The SMSF's also need you to be an active, educated and savy investor to be successful, they are definitely not a "set and forget" investment and are not for the financially inept.
I know you love property investment and already have your own properties outside super from previous posts. I don't know if you do any direct share market investing; but I am guessing you are already overweight in exposure to property. You are going to be adding to that overexposure by investing your super in another property. ATM I guess you have a managed industry super fund through your employer which would no doubt have a fair level of investment in shares, giving you at least some level of diversification.
Now if you invest your entire super into one property in the fund you have no diversity at all and consequently a huge risk factor as all your eggs are in one very small basket given the geared funds available to the SMSF. Personally I think you would be better off investing in quality blue chip shares that pay a strong fully franked dividend than going into more property. Your yield will be better than residential property and you don't have the running costs either. You also get a refund for the franking credits from the dividends
since the SMSF tax rate is lower than the company tax rate, adding to your returns.
Anyway lets assume you ignore that and proceed with the property purchase in the superfund. In my experience the costs quoted in an earlier post are way light. In my recent SMSF commercial property purchase the costs were:
Bank for loan set up- $6500
Now admittedly it was probably a bit more complicated and time consuming than what you are contemplating; but these loans are VERY expensive to set up and the paperwork and utter crap that is required by the banks is simply incredible. Without a doubt the most time consuming and expensive headfuck of a loan that I have ever done in my 30 years in business. To the point where I almost pulled the pin on the whole loan and paid cash for the property instead. The only thing that stopped me was if I had done that I would have been overweight in property in the fund……….investment diversity is a must.
One further thing to conisider that hasn't been mentioned with these superfund property loans is that you are not allowed to fundamentally change the nature of the property. In other words you can't buy a property and develop it. You are stuck with the existing property and the yield you can screw out of the rent. Big negative as you should always aim to buy a property that you can do something with to increase the returns.
Now the LVR ratio's that have been quoted are a bit high too. They have tightened up since these loans first came about and although you can still get 70% or so, the interest rates are too high. I went with Bendigo Bank who do a maximum of 60% LVR; but the interest rate is pretty close to housing loan rates i.e cheap. I only went to 40% LVR as I wanted to be very conservative and positively geared.
That should give you plenty to think about for now; but I am sure I have forgotten to mention a few things which I will add when/if they come to mind in the discussion.
This is a profile of the average SMSF from ATO statistics BTW:http://www.superguide.com.au/comparing-super-funds/typical-smsf-trustee-profile
IMO about 1/3rd of them would be better off with a managed industry fund