What are you doing with your SMSF ?

Good afternoon PropertyChatters

SMSFs are possibly my favourite topic as I love watching people take ownership of their own retirement planning. I'd be really interested to see some posts on what PropertyChatters have done so far with their SMSFs and what they plan to do in the SMSF going forward.

Bring on the stories !!

 

I am onto my 2nd CIP in my SMSF, settled a few weeks ago. Thanks to council rezoning its picked up about 100k in value since the lease with option was signed a year ago

 

Created SMSF with the folks. Pulled together our funds and bought two IPs.

6.1% and 7% yield respectively, ticking along nicely. It was a pain to go through the setup and paperwork but now looking back, it's worth it.

Cheers,
Michael

 

Ours is investing in anything but property so as to diversify our holdings and is doing quite nicely.

 

Nothing right now, but would be good to hear some ideas.
Don't want any more property though.
Wouldn't mind putting it all down on a high risk play.

 

i've never looked at my SMSF until recently where the fees were like 2.5K and negative 2% growth. I have now switched to esuper fund (fee free till 2017) and looking to get an rental ip to possibly do short term leasing. According to my numbers i hope to generate around 10-15% return.

 

Hubby is loving the SMSF, only set up a year ago, bought a Commercial Property to suit his own business (heavy transport) -his company rents it from his SMSF, double win situation.

 

I closed mine. Lots of reasons but a main one was that I don't want all my investments in residential property. My goal is a diversified portfolio inside and outside of super. I also want an income stream after I retire that doesn't involve tenants damaging my asset

Besides, my super fund performance is very good and has low fees. Self managed super ended up not being for me.

 

That is ideal!

 

@Perthguy yes, while renting a SMSF residential property to a "related party" is not allowed, renting a commercial property the SMSF owns to a business one of its members owns and controls is permitted.

 

Would be nice to have enough funds to get into commercial property. Maybe one day…...

 

Have 3 properties in our SMSF and looking at increasing when opportunities arise.

Will be looking at ways how our SMSF can purchase our developments, still working on this one.... this is a little over my head

 

Yes and no. While the sun is shining things are rosy. Some things to remember with commercial property are:

Depending on the terms of the lease, the tenant may be responsible for paying for outgoings such as council rates, water rates and insurance. Cha-ching!

But...

The value of the site is related to what the tenant is earning. Fingers crossed the tenant's business goes well.

Commercial tenants often pay rent quarterly (rather than weekly or fortnightly as do residential tenants). As such the first you may know of a tenant's financial strife is three months deep when you've dipped out on three months worth of rent.

It can take a lot longer to find a commercial tenant, so vacancies might be long.

LVRs are lower and interest rates are higher. For this reason, some folks prefer to use resi to build wealth until they can afford to buy commercial property without borrowings.

Pros and cons in everything.

 

Same here, I was tempted but I have a lot of residential property so thought I'd be better leaving my super as it is for diversification. Of course costs also need to be taken into account and after stamp, LIM, smsf costs and then selling costs I imagine you'd need to be holding for a very long time, see a good boom or some other major increase in portfolio value. Just my thoughts.

 

I know that nothing is a guaranteed money-spinner. Was just thinking it would be nice, as far as diversification goes, to add some commercial into a IP portfolio, along with residential. I know I need a few more ,000 at the end of the balance to be thinking about going down that path though. I know the lotto gods will smile favourably upon me some day………..

 

Or REITs through your existing super fund

 

As long as you don't need to borrow funds to do the development and aren't running it as a business through your SMSF you can do a development.

 

We settle on our second SMSF purchase on 1st December. The project is to build a duplex in Perth and sell one, keep one. We've gotten Planning Approval (DA) before settlement but can't apply for Building Permit until we own it #niceproblemtohave
We have 4 people in the SMSF to get the account balance high enough to do projects within it. We did the pay forward 3yr contributions to get the balance to where we need it.

 

How much does it cost to set up SMSF and the yearly fees associated with it?
Is there a certain cut off line on how much you need to have in super fund before setting it up to make it worthwhile?

 

The APRA rules have changed that, the servicabilty requirements mean you may not be able to borrow more against a residential property than a commercial property . I have a commercial loan with West Pac @ 4.39%, that is less than my residential loan with BoM. My commercial lease is paid 6 months in advance, very handy when it can be tripled by using it to buy Bellamy shares. The value of the site is determined by what competitors for the site think they can make from it or the market.