For example:

Property A – Loan – Monthly interest charges $111.11

Property A – LOC – $100,000 limit available

Property B – Loan – Monthly interest charges $222.22

Property C – Loan – Monthly interest charges $333.33

Therefore the LOC against property A with the high limit is treated as the "master" account where we normally pay for the utilities, bills, etc. can also be used to pay the Loan Interest repayments on Property A, B and C's loans? or would people normally just treat each one separate and use a standard transaction/savings/offset account to make payments to all 4 accounts directly?  

Of course, keeping in mind trying to maximise deductibility and all that too.

If no consideration is passed between the two would it still constitute a onsell?

firstly, $7k is far too steep for set up. We are closer to the $2,200 mark for property set up with limited recourse borrowing ability, legals and fees.

Your super balance is not the final decider We have both set up SMSF's and helped people invest in property for less. From a lending point of view the bank will take into consideration your (and partners) age, employment, wages and more importantly super contributions. Also the rental appraisals you get done on the potential property to see if it is viable.

Someone with $70k in super could look at property in SMSF if they earn $150k+, can salary sacrifice and choose a high rental yield property.

with a low balance in play you almost need to work backwards from finding the property, to then satisfying the lending criteria. If that makes sense. (where as outside of super you might go to the bank, find out how much you can borrow, then go find your investment… you need to find your investment property, get the rental appraisal and then look at finance).

as a guide:

At $90k balance with an average income (2 partners working/contributing) I would be looking at low end townhouses possibly… $300 – $320k.

I was hoping someone may be able to help with some of my questions in relation to SMSFs.

My partner and I are thinking of setting up a SMSF in order to purchase a property. I have heard (and read) lots of different opinions on setting up a fund, with some saying you need as little as $100K, with others saying don't event think about it until you at least have $150K +. Currently we have a combined amount of $90K.

My questions are:

• what is the optimum amount you should have in your super before looking into this?
• is around $10K the average cost of setting up a SMSF? ($7K to set up and $3K for incidentals)
• if we were looking to purchase a property for around $320K, I am thinking $90K be sufficient to just cover these costs? (set up, 20% deposit, stamp (NSW), closing costs etc) Are there any major expenses we are missing from this equation?
• If the property is positively geared, are you able to set up an offset account on a loan in a SMSF so that any rental income and future super contributions are able to sit against the mortgage?
• If over time that property is paid off by rental and additional super, are you able to sell this property and using this cash purchase a property of higher value? (we are both 30 so still have at least 30 years in the workplace)

We understand that you can't draw down on the equity to purchase another property outside of the SMSF, however that isn't a isn't a huge concern for us as we have already acquired three other properties and can draw down on the equity from each of these for additional investments.

Thanks for reading through my questions and I look forward to hearing your comments and suggestions.

Creasy

Hi Terrw,

Are you able to advise what is the best way to structure accounts for people where you have a basic portfolio such as the follows and looking to be able to most effectively scale up and grow the number of investment properties whilst still making sure we are maximizing all tax benefits, lowest costs and having the flexibillty.

• 1 x PPOR
• 2 x Investment Property

I'd be interested to hear what combinations of Home PPOR Loan vs Investment Property Loan, Offset Accounts for each or Line of Credit account structure people should be creating. Moreover would be curious to understand how best to operate these. For Example like: place all salary in account 'X', all rental income in account 'Y', all renovation/bills/deposits for new IP from account 'Z'