Terry's right. I agree with him 100%. To expand on his points a little:

There are some good strategies out there involving SMSF and property, but I would still hesitate for a few reasons:

1. Equity can't be accessed. ie once growth kicks in you cannot increase the loan.

This is true, at least for the moment.  If one was planning on doing a 'Jan Somers' by using the first property to get the next and so on,  at present it can't be done.  You're limited to one per deposit.  If you wanted to have a second property in your super, then you would need to have a fresh deposit in your super (somewhere along the lines of another 100k) to go again. This is because the first property is somewhat 'fenced in' by a trust when you set it up. This has it's cons, but also it's pros too, as the same thing protects the buyer from copping a hammering from the bank should the deal go belly-up.   I am hoping that sometime in the future the government makes it easier to access the equity from a superfund property, because after all, the idea is to create wealth and set people up with a retirement fund. Putting a block on the ability for duplication is only counterproductive to the overall goal.

2. Its complex using a SMSF to buy property

It can be, but not so much for the investor as it is for the people they employ to get it done. If you know the right people (like I do, because it's my job to!) it's a relatively smooth process for the investor.

3. Establishment costs are high

Depends on what you consider high.  We do the whole lot for about 5-6 grand. That includes setting up the SMSF from scratch, and doing the paperwork for using it to buy a property.  I've heard stories of people charging as high as 30 grand to get it done. (Ridiculous.)

4. Rates are high

Actually, I might ask you this question Terry.  I've been told it's about half a percent higher? Is that right? How much higher is it?

5. LVRs are lowish

Banks usually want you to put a third in as a deposit. That can be a lot to find, when comparing it to a regular loan (not through super) where you can have a much smaller deposit. However, it's a weigh up. One way gives you lower or zero capital gains tax, but requires a bigger deposit. The other way is a smaller deposit, but you still get hit with cap gains. What do you think is better?

6. Its a good idea to diversify and invest in some shares using super too.

I'm definitely not saying that I think property is the most profitable of investments. Not at all.  After speaking with several financial planners on the subject (I am not one!) , a lot of them say that they much prefer stocks and shares etc as it has a higher potential to turn a bigger profit. I cannot disagree.  But then, not everyone is interested in stocks or shares. I don't know anything about them, and it doesn't really get me all that interested either. It just doesn't sound like my kind of fun.  I'm fully aware that if I educated myself on stocks and shares, I would probably learn how to make more money through them than through property. The thing is, I enjoy property. I'm excited about property. I like the concept, I loved Steves book, and I plan on duplicating his methods. It may not be the absolute best  option if I was trying to maximise my profit through the most efficient means, but surely you'll agree that getting involved, taking control of my own super, and investing it through a means that still works and that excites me is better than leaving it sitting there doing nothing in an externally managed fund?  

Thoroughly enjoying this chat.

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