Hey all, Heard alot about SMSF on the forum and that it can be a good tool to reduce tax. I will do all the research necessary, but what I want to know is whether I should start now or wait until my property portfolio is a bit bulkier, or when I reach my servicing cap. Earning 80k ish PA, no dependants. Let me know if you need any more info. Regards, Arc
My cents 2 cents worth is one factor in starting a SMSF will it help you beat the returns of a regular more aggressive vanilla share strategy executed the traditional way. Otherwise it can be just a cool idea pushed by various advisers that can erode comparable returns through all the extra fees etc. Super is already very complicated to begin with and creating a SMSF just adds another layer of complexity again, so you better get it right.
Considering compulsory super started in 1992, older investors may not even get to $200k before retirement
Hi mate - def not - you'll be paying 4% a year in admin, plus $1500 to get goong. Plus a lot or doubt around changing borrowing potential etc, might further mitigate the perceived benefits regardless. Low cost fund invested in LIC for example for better choice. Smsf to me really only useful for self employed and even then mainly those who own business premise.
Crazy to set up the SMSF just yet. well...not so crazy to set it up, thats perfectly fine if you feel you can beat your retail funds returns - but crazy to purchase resi property if you do set one up. Why? For one simple reason - the impact on your personal borrowing capacity when you sign as PG ( personal gaurantor) to the LRBA ( Limited Recourse Borrowing Arrangement) . I would recommend you exhaust your personal capacity first.... build the portfolio you are able to, as fast as possible, so it has a good deal of time to mature. Inject some cash cows into it and uses the surpluses to deleverage during the IO term and to carrythe load when your lending reverts to P&I. Only when all personal borrowings have been exhausted and you arent planning on any further personal borrowing for many years , should you even consider SMSF borrowing. The impact of being a guarantor to that debt should not be underestimated when combined with sensitised assessment rates, I/O quotas and P&I repayments PS - always use a product with an offset for your SMSF LRBA
I'm looking into this for myself at the moment. I've learnt a lot from Cuffelinks, it may be of interest to you (SMSF Strategies Archives - Cuffelinks).
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