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Property investing and SMSF

Discussion in 'Superannuation, SMSF & Personal Insurance' started by sahap, 4th Aug, 2015.

  1. sahap

    sahap Member

    Joined:
    23rd Apr, 2014
    Posts:
    6
    Location:
    Geelong
    Hi Guys
    just wondering is it a good idea if I want to start investing in Property through SMSF ? My problem is I am looking at more than 1 property in the yrs to come and have the flexibility to direct funds ( If I sell ) to where ever I want , I believe in SMSF you are pretty well stuck where the money goes and its lot slower in Accumulating several properties and I like to build instead of buying at a retail value as I have done yrs ago .

    I neither have too much cash in my super nor do I have lot of cash in the bank other than Equity in my house .

    Thanks
     
  2. helloworld1

    helloworld1 Member

    Joined:
    5th Aug, 2015
    Posts:
    5
    Location:
    VIC
    Do you already have a SMSF or an industry super fund? I'm not sure what you mean by direct the funds anywhere you want. An SMSF is more complicated than an Industry super fund. You do have control, but you can't just use the funds for whatever.

    If you don't have much cash in super then a SMSF may not be right for you. But you can still sell it later to reinvest in something else (I'm not an expert). You'd need a SMSF loan but I did read that banks are cutting back on these so who knows how much longer they will last.

    Here is a good example of what you can borrow that I stole from here SMSF Loans | Redwood Advisory SMSF Experts in SMSF Loans

    Let?s say an SMSF has $100,000 in savings and you would like to purchase a $350,000 SMSF property. Prior to purchasing SMSF property. Once pre-approved at 80% loan to value ratio (?LVR?) or $280,000 using a limited recourse loan. You will find a SMSF property and sign a contract of sale. The deposit of 10% or $35,000 is paid from your SMSF.

    A valuation is conducted and the loan is then formally approved. Settlement is arranged and the costs to complete are paid from the SMSF including Stamp Duty, SMSF Loan application fees and legal fees. Remember SMSF Loans can be over a 30 year loan term, during this time your property will hopefully appreciate and your rent will cover your repayments.

    That might be your only choice.
     
    Last edited by a moderator: 16th Sep, 2016