Starting a SMSF early

I am in my 5th year off full time work and have 30k in my superfund. (Should have been more if I didn’t confer my shares to cash last year)

I am wanting to start a SMSF to purchase a property.
Has anyone started a SMSF with this low amount? What did you do? How much did you top up the account? I’d love to hear everyone’s thoughts and experiences.

The Don

 

I did but I have the ability to do it all myself (and my auditor as cheap). Generally you would not with such a low balance.

 

Spending 5k on fees isn’t a worry if I’m making 10-20k a year in capital gains.

What sort of property did you buy first? Commercial, residential? Deposit? What lender?
Cheers

 

Currently maxed out.
Have you got a SMSF?

 

I’d love to hear about your experience with SMSF

 

Have you checked the max LVR banks would lend to SMSF?

 

Yes

 

Any advisor recommending that you set up a SMSF with a balance that low should have their licence cancelled.

How do you plan to contribute sufficient funds to justify a SMSF if you haven't already maxed out your concessional & non-concessional contributions over the past 5 years?

 

My plan is to continue to build wealth. I’m happy to contribute 20k if it means I can buy a unit in SA or Qld in my SMSF

 

i can’t see where the deposit for the property will come from? $30k minus costs to set up isn’t enough as a deposit for a property.

What if the property needs maintenance and is not cash flow positive- where is the money in the smsf to pay for that?

you may also run afoul of diversity requirements - they do not like smsf only holding one type of investment

 

This is crazy!

 

Are you triple sure on this? Only a few banks do smsf lending and the deposits required are higher as the LVR is often lower.

 

WILL have their license cancelled and should, however, online super funds can get away with it. Isnt it wonderful.....

Cheers Ivan

 

$30K is a totally unsuitable sum for a SMSF. Note that advising on a SMSF estblishment usually requires an Australian financial services license (AFSL) however the observation is so factually correct that wont pose a concern. The ATO vet smsf formations prior to issue of a ABN and I would argue they would refuse a SMSF registration in such cases as they can "see" yoour total super balance. Even asking such a question with $100K would be the same view.

 

Remember to apply your hourly rate, not so cheap

BMM, 3.99% with fully functional offset, yes an offset haha

 

I have a friend who purchased a 100k 2br unit within 10 km of the Adelaide CBD.

you don’t think it’s worth putting in 10k to my SMSF to make a deal like this happen?

cheers,
The Don

 

If I said yes or no it would be giving financial advice.

Firstly you would need to consider what is the benefit in investing in such a property.
Then work out the extra costs and requirements of a SMSF investing in it, then
consider the opportunity cost of the SMSF doing so - what is it missing out on by not investing elsewhere.

 

Is a smsf allowed to be than concentrated in its investments anyway?

 

Colin, you may wish to be a little more cautious in issuing such advice, sound boring, but you may want to delete it.