Leveraging your super, why would you not?

To quote dan

"One – set up costs are expensive, as are ongoing accountant / auditor fees.
Two – can't use one property to leverage another.
Three – current ambiguity in rules as to whether CGT is payable once loan is paid out, on transfer from bare trust to SMSF."

You might be pleasantly surprised by a solution to each problem.

One. Set up costs are the same or less than what most people pay in fees to a managed fund already. It costs approximately a grand to set up a SMSF, which is paid by the fund itself,  and about a grand to pay for an accountant to look after it once a year., (depends on the accountant).   5 billion a year is paid by australians in superfund fees (That's a LOT.) The average cost you pay in managed funds is about 2 percent of whatever is in there. At 100k, thats 2 grand.   So at worst, you're going to break even. SMSF's costs you no more than you're already wasting in fees. It's just a change in ownership, like opening a different bank account.

Two. Can't use one property to leverage another?  So you're saying that because you can't triple your super's power TWICE, that it's not worth tripling it once?  "If I turn my 100 grand into 250, but i'm not allowed to turn my 250 into 625, then I should just stay with the 100 to begin with."   150 grand more in super for a few measly phone calls? Come on, man!

Three.  Even if you had to pay capital gains tax on it when you retire (when you don't) it's still better to start with 400 grand and double it, MINUS all those 'costs' that you're worried about being there, than starting with 100 grand and doubling it, and not having any costs.

Essentially, if you've got a hundred grand sitting there, there's no good reason to let it sit there doing nothing. It's just stagnant money that is being eaten away by fees and inflation, and if you were thinking it would make a healthy retirement, think again.  Leverage it, invest it, and grow it.  It doesn't cost anything more than you're already spending in fees, all it costs you is a bit of education and a few phone calls.

The only reason why one wouldn't use their super to invest in property is because they're already good at investing in stocks or shares, and they enjoy that more than property. But you wouldn't be here if that was you.

Yep, You're right on all counts Dan.

The ongoing costs of audits etc do fluctuate, depending on how complex your super fund becomes. If you're going to do stocks and shares, theres a lot more detail in there as you have to record every trade, and there can be hundreds of them in a year!  If you're only going to do property, (and most people do do only property if they're doing property, because property requires a large chunk of money being tied up for some time) then the bookkeeping is a lot simpler, and therefore cheaper for an accountant to do it.

The bonus with doing it through people like the guys I work for is, they set people up with their super as cheaply as they can, and have the ongoings as cheaply as they can using in-house accountants that can look after things for people, because it's a drawcard for where they can really make the money, and that's through the purchasing of the property itself.   If people get educated on how to use their super, suddenly you have a whole bunch of new investors that suddenly CAN afford to buy a property, and want to, and because they were so happy with how well they've been treated, and how cheaply they got things done for with their super, that the relationship is already there, and they're happy to look at the guys next doors property first, before they go somewhere else.  Super Self managed are there specifically to create a market of investors that previously didnt exist.  The customers love it, cuz it's all done cheap, and Coldwell Banker love it, because now people are in a position to buy something through them.

And yes, when it comes to buying through your super, you don't have to just buy through your super. Often people will come to us to buy a single property through their super, but then turn around and also buy another 2 or three properties from coldwell banker next door aswell. 

Works well, dunnit.

Wow. Pretty rough outlook WJ Hooker!

But something just doesn't add up.  If you're so sure that property investment is about to dissintegrate, what brings you to a property investing website?

Easy, stimpy. Easy boy.
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