Use Your Super To Invest In Property

Discussion in 'Innovative Techniques' started by megsaletta, 12th Feb, 2009.

  1. megsaletta

    megsaletta Member

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    Has anyone used there Super to invest in Property. You can use your Super to borrow and invest in Property. Everyone is saying you need alot in your Super to be able to do this? Any advice will help.
     
  2. Rob Williams

    Rob Williams Festina Lente

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    Have you read the Ed Chan book on the subject? Highly recommended.
    Depending on who you ask, the super balance could be anywhere from about $80k upward to make it worthwhile. Others say $100k plus.
    YMMV (Your Mileage May Vary)
     
  3. JamesGG

    JamesGG Member

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    Hiya,

    Mike from Guardian Partners has put together some very good information about this. Link on this forum: here.

    Cheers

    James.
     
  4. cegosling

    cegosling Member

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    Self Funded Super Works for Us

    Hi, My husband I I have just pulled out our super (only $80k) and borrowed to buy an IP in Ballarat, p/p $170k. NAB lends to 70%, so we anticipate residual loan will be paid out in 10 yrs or less. On this basis our super fund will then have an asset worth say $250k (maybe more but conservative view) , an amount which we couldn't have put away ourselves whilst raising a family on 1 wage. The + is if we then sell this property, there is no capital gains, and we can then use the equity to borrow for another property and so on. I know there are +'s & -'s for self funded super, but this seemed the best way to get ahead for us.
     
  5. lisag

    lisag Member

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    thinking of doing this myself (& hubby), have been told as well, around $80 - 100K to start up with. You need to find experienced persons/ company to help with the start up as I believe there has been many incorrect operations of the SMSF re: investing in property. ATO website has some usful info.
    My husband and I have over 30 yrs of work between us and in SF contributed by the Employer we only have around $80K. Doest look that great!!!:(
     
  6. Jamie_D

    Jamie_D A numbers man

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    Hi Megsaletta

    Borrowing and buying against SMSF is becoming more popular. Great tax benefits depending on your age etc.

    It is best to sit down with a FP and accountant to work out the most appropriate strategy. Everyones situation is different.

    You will need to also set up a bare trust which complies with the ATO and find a bank to fund the loan - therefore find a MB that has had some experience in lending against SMSF.

    It's definitely worth a shot as your super probably isn't performing how you would like at the moment.

    Huge potential in the Aust market and will become increasingly popular in the next few years with the baby boomers retiring on huge super amounts.

    I have helped a few people out already and have a great FP/Acc to assist you also. He holds seminars on this topic regularly.

    Good Luck
     
  7. SOULFLY3

    SOULFLY3 Member

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    Is it worth doing this for around 15k ? and if so who does one go about doing it this way?
    I was thinking of taking the 15k out and investing it into another ip ?
     
  8. Rob Williams

    Rob Williams Festina Lente

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    You might struggle with $15k. From what I've seen, lenders have a minimum lend for SMSF IP's and a minimum property value, so at $15k I don't think it would make the cut.
     
  9. SOULFLY3

    SOULFLY3 Member

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    ok thanks so theres no way of accessing the money and taking it out of super at all?
     
  10. csc

    csc Banned

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    yes i highly recommend this read also!

    i dont have super ,yse;f but my wife is considering this venture when its right to buy into the market again...

    good luck...using your super will open up a whole new world, you will never want to go back to the old ways of watching shares go up and down again......long term shares are great but russian roulette if they will be any good when you retire...like many who were unlucky to lose big time last 12 mths on retirement...my father in law is out of pocket nearly a mill currently,,,mind you its a paper loss,,,good luck, read that thread!
     
  11. craigb

    craigb craigb

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    TURN MY SUPER in to an IP cool! ihave 10k no 8k no, thats 5k hang on 4k ,
    sorry !
    Those shares are mooving a bit today?

    OK then 4k where do i sighn up then?
     
  12. csc

    csc Banned

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    buy quality art then...not so fickle as shares.....ps: i think after the next few days your share investment will be worth 2k...:p)
     
  13. craigb

    craigb craigb

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    me too! lucky to have nice art already, 1 x hart, 1x david hart, 1x kendel 1xpat harry, 2x NI NI otter, we stay at cheap hotels on our holidays u/know 115 night but we always spent at least 3k on somthing veerryy nice like those above.
    Cheers.
     
  14. BayView

    BayView Member

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    What is the rental yield and on-paper deductions on art?
     
  15. JamesGG

    JamesGG Member

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    Rental yield is often quite good. Will likely come down to the particular artwork and who you rent it to, I guess. I think Bluecard (?) has posted about doing this in another thread somewhere.

    On-paper deductions are a little less relevant in super given the brackets involved, but I can see what you're getting at there.
     
  16. csc

    csc Banned

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    id have to talk to my accountant...hes was the brains behind me getting into art 15 years ago.............im not an"itty gritty" figures man..im just the money making man here.

    i know theres a good site online full of info about yield guides etc but for the life of me i cannot find it...sorry.

    buying quality art is long term though..rarely have i seen a quick killing in turnover...unless you were lucky to snap a real bargain somewhere..................

    i think there are some threads on SS about art..just do a quick search...others will know way more than me about the figures side of things....

    my initial investment in art was $10k buying 3 paintings, conservatively id say they are close to 120k now in value just for those 3..ive since invested further last 5 years but the others are nothing flash...yet! give it time i hope.

    good luck.
     
  17. chilliaa

    chilliaa Member

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    Maybe i am just more conservative with regards to superannuation. But i think just leave it where it is. Use an industry based superannuation fund, on a balanced option.

    This way you can focus on your own wealth creation strategies, knowing that if worst comes to worst and you really stuff up, at least you have your super as a last back up which for most people will provide a reasonable (but not great) income in retirement so long as you start making super contributions when you are younge.
     
  18. BV

    BV Think outside the square

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    You don't need a lot, it depends what you buy.
    We did it with $115K (Bought a house for $323K)
    Used $90K as a deposit and the rest for stamp duty, legals etc
    I've explained the process in another thread in case you are interested
    check it out
    http://www.somersoft.com/forums/showthread.php?p=569533#post569533
     
  19. josko

    josko BluePlanet-Green Shackles

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    Hi there,

    I bought my IP with 90k super over two years ago, now. It is now positively geared and really quite manageable.

    It does take some managing though and be sure you fully understand the rules that apply to SMSF's.

    You will be audited on your SMSF every year and need to make sure your transactions are all legal and legitimate.

    Regards JO
     
  20. AVD

    AVD Member

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    Hi Josko!

    Pure curiosity - how did you find the process back then? Was it relatively easy and has gotten slightly more painful or was it simple back then and gotten harder?

    Did you do it after September 2007?

    Any comments much appreciated!

    Alysha

    www.gatherumgoss.com