Self Managed Super Fund - Pros/Cons
- Thread starter kinga4610
- Start date
The problem is you can't borrow against the property that the SMSF owns. It has to be owned out-right i.e. unemcumbered.
Even worse .. when the IP increases in value you can't get your hands on the new equity to grow your portfolio.
What makes this particular IP game "financial fun" is the combination of high LVRs available and negative gearing (actually taking advantage of our high rates of personal income tax.)
SMSF don't have either...
LL
Even worse .. when the IP increases in value you can't get your hands on the new equity to grow your portfolio.
What makes this particular IP game "financial fun" is the combination of high LVRs available and negative gearing (actually taking advantage of our high rates of personal income tax.)
SMSF don't have either...
LL
There are many, many strange rules for super-annuation funds ...and they keep changing.
My response was pertaining to residential property investment.
Farms etc you need somebody with more specific knowledge than me. Sorry.
LL
My response was pertaining to residential property investment.
Farms etc you need somebody with more specific knowledge than me. Sorry.
LL
You can buy almost any type of income producing property you want as far as I'm aware. The only thing is, you need to buy it outright, you can't have a mortgage on it as a super fund isn't allowed to borrow money.
As it has to be income producing, your super fund can't buy a house for you to live in.
Cheers
As it has to be income producing, your super fund can't buy a house for you to live in.
Cheers
We are looking at purchasing some commercial property through our SMSF (no loans involved) and then renting it to a business. The business can be our business, as this is considered at arms length.
Our Super has also purchased land and made over 100% profit in 4 years. We sold the land this year so we are now up for CGT! Only 10% though.
Our Super has also purchased land and made over 100% profit in 4 years. We sold the land this year so we are now up for CGT! Only 10% though.
There used to be a process of the SMSF purchasing units in a unit trust that holds property.
In this way the SMSF could carry the 20% with you operating the rest of the property.
I have not used this strategy and I am under the impression that this was blocked as an available option (arms length etc)
Cheers
In this way the SMSF could carry the 20% with you operating the rest of the property.
I have not used this strategy and I am under the impression that this was blocked as an available option (arms length etc)
Cheers
Instead providing a laundry list of pro's/cons, I thought it would be better to provide a personal rationale for setting up a SMSF. The key reasons for me were the following;
** Have greater direct control, visibility and ownership of money held in super. I have historically not really bothered to track and be active with my funds in super, which is in stark contrast with my non-super investing actvities.
** The SMSF will be purchasing an investment held personally by myself, the amount, which would payout a loan plus some extra cash (after a small personal CGT liability). This allows me to increase my personal cashflow, whilst having a small sum of money which I will be using to fund another IP purchase in my name.
Whilst I understand the rationale behind super and the value that it provides to the majority in the community (i.e. setting aside funds for retirement), I still don't think 'super' as it works today, is the best use of funds for my personal situation. The establishment of the SMSF given this, allows me to access some of my super funds now and as a result, will give me added ability to fund future investments in my own name. I find this is better for me, as I have control of these assets and leverage the funds better today, rather than waiting till retirement.
** Have greater direct control, visibility and ownership of money held in super. I have historically not really bothered to track and be active with my funds in super, which is in stark contrast with my non-super investing actvities.
** The SMSF will be purchasing an investment held personally by myself, the amount, which would payout a loan plus some extra cash (after a small personal CGT liability). This allows me to increase my personal cashflow, whilst having a small sum of money which I will be using to fund another IP purchase in my name.
Whilst I understand the rationale behind super and the value that it provides to the majority in the community (i.e. setting aside funds for retirement), I still don't think 'super' as it works today, is the best use of funds for my personal situation. The establishment of the SMSF given this, allows me to access some of my super funds now and as a result, will give me added ability to fund future investments in my own name. I find this is better for me, as I have control of these assets and leverage the funds better today, rather than waiting till retirement.
