Advice needed! Analysis paralysis Delemma. Help!

I agree it's still important to invest what you have inside super already, but I don't like property in super. Also I will never salary sacrifice anything into super because I can employ the $ much better into property, with much more effective gearing management long term, and still pay limited tax on those $ because of property related tax deductions.

Problem is you can grow your portfolio alot quicker if you keep it outside of super and maximise your buying as much as possible outside super. The minimal amount in super (only 9% of salary) I personally prefer to just hold shares for some minimal diversification and low cost / low paperwork reasons.

Even if you first buy outside super, then decide to buy one property inside super, it will still slow you down. All the lenders (I know of) that lend to SMSFs require a personal guarantee from the director of the trustee. This goes on your credit file, and must be reported on all future loan applications in your personal name forever ongoing (unless you payout the loan). So if you borrow $800,000 in your superfund, then your borrowing capacity in your personal name will always be reduced by $800k.

This can have a massive effect on your ability to expand your portfolio, especially if you buy more than 1 in super. For example if your borrowing capacity is only $1m, then after taking into account the loans in your superfund (assuming $800k super debt), you can only borrow $200k in your own name. This is a very simplified calculation and it involves more than that but I hope you can see how it is severely limiting unless you are on a very high income.

These are the problems I see with superfund IPs:
-Negative gearing benefit not received against salary in the same way
-Interest rates higher
-Setup costs higher
-Fees higher
-Requirement for more trusts and trustee companies
-Annual compliance and admin
-Required deposit higher
-Cannot leverage equity from one property to expand portfolio into the next property. You have to "save up" your deposits for every single property individually. Eventually your first property purchased will have such low LVR that it will be full of lazy dollars equity not working for you like it could be.
 
Thanks everyone for your thoughts and advises. There is so much to learn and I know I'll get there eventually. I will certainly make contact to the Names mentioned earlier. It's a good start for now!
Thanks and wishing everyone a peaceful Xmas and a success New Year ahead! Xx
 
Top