How much do I need in Super to start my own SMSF?

How much do I need to set up my own SMSF

and what do I need to know?


 

The Royal Commission has ignited a lot of talk in the media surrounding Self Managed Super Funds raising more questions than answers

We are not financial planners nor sharing financial planning advice merely quoting sources and or using basic logic in what we are sharing with you

 

What we do know is that industry funds (generalised) tend to perform at 5% to 7% per annum over the long term + fees, where in your own SMSF you have a wide choice of investment vehicle and can therefore be more hands on with our own Super destiny

 

NB : It is important to find out what all the fees/costs are being charged to you now wherever your super is being invested. Allows you to compare to what you could be doing and the fees there

 

There are investment platforms out there where there are no minimums, but before you set up your own SMSF you need to realise that there are some upfront costs for setting up the SMSF and also a SMSF requires annual audits which also cost money

 

What this means to you and your super is that once you understand the upfront and the ongoing then work out the minimum you would require in super that not only covers your annual audit / accounting fees but also give you returns in excess of average super funds performance

 

Set up fees could range between $700 and $2,500 depending on complexity and purpose and annual costs for Admin & Audit from around $665 to $1700 for basic SMSF’s and higher for more complex Self-managed funds and some other minor fees

Meaning that the lower the balance the higher the cost as a ratio, thus requiring investments to cover costs and return an ROI you are comfortable with

 

You will have heard a figure of $200k required by ASIC  as a minimum to have your own SMSF, this figure used to be a recommendation and not a legal requirement

If you have an amount you are comfortable with knowing you could achieve the financial return on investment you want then having control and choice over your retirement wealth is imperative to enhancing your retirement goals. This is why there as so many SMSF’s registered with Billions of Dollars under Self Manged Super Funds management

 

You may encounter negativity from your financial advisor and the media (it’s their job) however an advisor is obligated to put your interests ahead of theirs or the conglomerate they represent, your own research and due diligence will allow you to come to an informed decision

 

Once again : the amount you have in super, the rate of return you are getting versus what your research indicates you could get, less upfront and ongoing fees should help you determine what is the correct strategy and investment vehicle for you and your family

 

Other aspects for consideration could include : how best to maximise your wealth in retirement planning, what flexibility do you have and want, the varying investment vehicles available to you giving you a wide array of choice and thus control when comparing where the funds are invested now and what choice, control, flexibility, return on investment and ongoing fees  

If you are unable to do the comparisons and calculations speak to your financial advisor and or your accountant or ask us for a referral to a reputable professional who

can assist you so that you can make your very own informed decision of how you want your monies in Super to be working for you

 

Whilst Planning

Did you know that a major advantage of investing in a property within a SMSF is that you are able to Leverage?

 

What this means to you and other SMSF members is that you can invest only 20% (or more) yet achieve Capital Growth on 100% of the property value + your tenant will help you build wealth by paying rent and depreciation can be deducted against Super contributions further lowering the tax on contributions

 

The numbers which are underpinning an investment in property could return you around 10% to 17% per annum – *depending on the type of dwelling, rent, interest rates, deposit, capital growth etc, we can help you estimate the cash flow

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Brisbane Tipped for Strong Capital Growth

Brisbane & Pockets of South East Qld Tipped to be the strongest Property Market in Australia

“Investing in an area with very high and growing demand improves your opportunity for strong rental yields and capital growth potential we all agree”

Identifying these areas and expanding your investment potential into new geographic locations improve the opportunity of creating and securing more wealth, with online inquiry for property in Brisbane and South East Queensland on the increase … meaning astute investors are investing in locations from where they live

Brisbane is tipped to be the strongest property market in Australia in the next five or six years.

Leading real estate industry figure John McGrath described the Brisbane market as undervalued and predicted it would soon start to catch up to southern powerhouses Sydney and Melbourne.

Mr McGrath, the founder of McGrath Real Estate, was speaking in Brisbane at a function on Wednesday and “very, very confident” in where the property market was right now, particularly in Southeast Queensland.

“We think Southeast Queensland, and Brisbane is a focal point, is going to be one of the strongest markets in Australia.”

 

Click here  for full article and watch Adam Di Marco share words of Wisdom here enabling you to come to your own informed decision on where to focus your own research on

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Sydney too expensive to Invest in? Where should I invest?

Sydney too expensive to Invest in?

Sydney Return on Investment continues to drop, property values exceptionally high & rental yields exceptionally low as a percentage in most sought after locations in Sydney

Investing in Sydney might not make investment sense to you with rental yields fallen way behind the Capital Growth as Sydney peaks in value?

Are you comfortable investing outside of where you live, if so and you merely view the property purely as an investment vehicle – your strategy would be worthy of including Brisbane, South East Queensland or Melbourne in your portfolio. Most of our online inquiries are coming out of Sydney and for QLD property …

Why?

Better value for your Investment Dollar + capital growth potential + Higher Rental Yields mean you get more for your investment in terms of property + yield and thus return on your Investment dollars working hard for you

 

Did you know :  Brisbane needs to accommodate another 1 Million Residents by the year 2031 requiring 30,000 new dwellings per year !

Ignore the Press : Brisbane on the Cusp of a Once-in-a-Generation growth opportunity on the back of massive Infrastructure Investment, new Job creation and a continued strengthening Population Growth where Vacancies are exceptionally low and Rental Yields very strong  read blog here

 

 

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Industry Super Funds continued Poor Performance and ongoing high fees

Buying property in Super

Why set up your own Self Managed Super Fund?

Industry funds dismal long term (lack of) Performance :

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Industry Funds results from 1996 to 2010 :

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  • corporate funds on average provided returns of 5.84% pa
  • industry funds 5.35% pa
  • the public sector funds 6.30% pa
  • and retail funds 3.66% pa

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And … more than 150 of the growth funds tracked by Morningstar have not earned more than 3.5 per cent a year — or 1 per cent above inflation — over the past decade. These funds contain about $16 billion of workers’ retirement savings.

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Thirty-three funds have delivered average investment returns of 5 per cent or more for the past 10 years, including some of the biggest funds.


“Ask yourself how does this help you create sufficient retirement income on your super contributions?”


It is widely known that Industry Super Funds attract ongoing annual fees which are further eating into your own retirement value. What most investors don’t consider is that you pay your Fund Managers every year even in years where your fund goes into negative performance. You are paying for this privilege – why??

  • In your industry fund, not only are you achieving dismal long term performance results on your own retirement funds but if you have $125,000 in your current super, ONLY this $125k is working for you!

Wouldn’t you prefer to take advantage of the power of Leverage; whereby you invest say only 20% of the value of the property and have the bank and a tenant fund 80% of the investment meaning you now have an Asset of over $500,000 working for you in your own SMSF and you only invested around $100k for the privilege


Compounding Returns on Investment

Compounding Returns comprise of Interest being earned on top of Interest for the life of the investment; the longer one invests this higher a compounded return will be … we agree

Based on the above returns of 5% pa, $100,00 invested in your Industry Super account would have grown to $1.54m in 15 years (excluding Industry Super annual fees for this exercise) but if the return was 10% per cent pa, the balance would only be $.51m over this same period

What this means to you is that being in control of your own Super Destiny you could be better off by over $900,000 this time in your own pocket!


“This is serious stuff you would agree!”


What if you set up a SMSF (Self Managed Super Fund) and secured a prudent investment property which generated a return on investment of 10% pa; can you imagine the returns on your investment at a regular 10% pa versus industry averages of a dismal 5% pa?!?  Could equate to over a Million $’s over 15 years more in your own pocket


How will a 10% compounded over 10 years or more positively effect your retirement lifestyle. What will this mean to you?


*This is not rocket science nor financial planning advice; merely using Logic and industry statistics

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Residential Property News- Winter Series

PACKED WITH INDUSTRY NEWS, DATA & OPPORTUNITY for You

 Property Focus

properT network

Although we continue to blog and educate you on the investment potential South East Queensland offers … Melbourne (primarily) and Sydney are high on our clients investment agenda (for obvious reasons) and we most certainly provide a lot of property to our clients in these Capital Cities

Property Headlines – ignore or believe?

Industry Research on factual data will clearly tell you Who to believe

So much negativity in the media. If you tell a lie often enough it begins to sound like the truth … experts advise if you are going to invest in property “Ignore the press”. If you are serious, rather look towards factual evidence and you will soon work out that there are opportunities abound to continue to grow and secure some wealth through astute property investment !

Rumours of the death of the Australian housing market are widely exaggerated,” says Craig James, Chief Economist, CommSec. Capital city home prices soared by over 10% with the latest rise of 1.6% in May 2016

Melbourne, Sydney, South East Queensland continue to demonstrate capital growth, low rental vacancies, strong rental yields with high demand.

Note : not all properties or locations are suitable for investment.

House prices continue to grow in most major cities …

… although you wouldn’t know it based on typical coverage in the media

The latest data from CoreLogic May 2016 suggests house prices generally have risen in the past 12 months in Melbourne (up 17.5%), Sydney (up 7.5%), Adelaide (up 3.3%), Hobart (up 4.0%), Brisbane (up 4.9%) and Canberra (up 1.7%)….. an annual rise of 6.6%.

Media paints the figures differently. One News Corp headline claims that “property price growth has ground to a halt”. The Australian says house price growth is “the slowest in three years”…. absolute BS!

read more here

How to choose an Investment Location

Identify and Focus on the Fundamentals underpinning your Investment

Once you have removed the emotion it is a really simple exercise.

Invest where the Government are investing, they want a return on investment
▪ Invest where Industry invest, they are encouraged by government to the location and also want a return on investment
▪ Both Government and Industry Create new Jobs
▪ New Jobs attract Population Growth
▪ Population Growth puts upward pressure on Property Supply
▪ This increased demand increases the value of property
▪ This increased demand places further pressure on supply of Rental Dwellings
▪ Rental Yields increase under the pressure of demand
▪ Capital Growth plus very low vacancy rates and strong rental yields equates to a sound investment

Read more on ‘the perfect storm’ and your investment opportunity here

If you know a town will grow into a City & property values will surely grow. What will you do about it?

Springfield Lakes

No picture can do justice to the Investment potential

Are you aware of what is happening in South East Queensland?

Springfield Lakes (Ipswich) will grow to the size of the Brisbane CBD, on the back of an $80bn investment, a planned population of 138,000 residents and 52,000 new jobs, 2 railway stations, hospitals, schools, a Uni, Industry Head Offices, massive shopping mall and more ! Ouch, what potential and in South East Queensland’s fastest growing region!
more here

Sunshine Coast – both government and industry investment into infrastructure and industry is creating 32,000 new jobs (14k over past 12 months alone) on the back of $7bn dollars investment into infrastructure alone. Largest hospital in southern hemisphere, new university, airport becoming International, new town centers built in Kawana and Maroochydore and more. Population growth is immense with 330k residents growing by around 7,000 people a year needing 3,200 new dwellings pa to meet the rising demand!
more here

Do you know what this means to the value of property in 8, 12, 20 years time = your opportunity now! Can you see the potential?

Towns will become cities and no one can stop this progress, it is happening right now and well into the future. We invite you to undertake your own due diligence and ride the wave to creating some of your own wealth from the blatant opportunity at hand. Ask us how, where or why by clicking here

Melbourne

 Melbourne Investment Property1

Melbourne property continue to demonstrate Capital Growth

Melbourne planned to be Australia’s biggest city by 2050!

On the back of a very strong population growth, high employment, sound economy + historically low interest rates the demand for property in Melbourne continues through Autumn.

Melbourne median house price has broken the $700k barrier for the first time at $713k! Melbourne achieved a massive 17.1% growth for past year ending May 2016 !

Compared to Sydney, Melbourne continues to offer investors value for their investment dollar + sound rental yields. With Herron Todd White predicting Melbourne to overtake Sydney during 2016.

Inner CBD, Southbank, Docklands to be avoided for investment purposes.

Middle ring suburbs and immediate outer ring highly sought after by owner occupiers and tenants alike placing upward pressure on supply.

Suburbs such as Carnegie, Oakleigh, Bentleigh, McKinnon have been touted as fast growth suburbs with sound infrastructure, sought after schools and public transport

Other inner suburbs such as Newport, Maribyrnong, Yarraville and surrounds demonstrate high demand being affordable and close enough to the CBD

Read more on “Why Melbourne” here

properT network | Investor Survey 2016

Your Help Please!!4 minutes of your time to take part in our annual Investors Survey !

Purpose is to understand and manage perception and market trends; the report gathered data will be shared with participants. Submitted anonymously or you choose to include your details. All data for properT’s use only !

Give us 4 minutes of your time, you may be surprised by your own answers – have some fun 🙂 Start answering here

Fact : House Prices continue to grow

Click & Have your say !

Greater Springfield

Greater Springfield

Planned for Greatness

… with 138,000 population and 1 in 3 employed within the new city!
Video Overview to your Investment Opportunity

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Self Managed Super Fund’s and Investment Property

SMSF and Investment Property

…what you would want to be aware of!

 

Investment Property in your SMSF

The STATE REVENUE OFFICE has clearly warned trustees of SMSF’s that he will be focusing on SMSF and investment property out of concern that trustees are making ill informed investment decisions on behalf of their SMSF’s!

 

The purpose of this blog is to remind you and enlighten you on the benefits of securing and investment property for your SMSF where the numbers actually stack up. This will mean you will be better off by thousands of dollars at retirement; by making an informed decision based on the underlying fundamentals and numbers underpinning the potential property.

The recent Financial Review article warns investors/trustees about two major issues in SMSF space with regards to investing in property; a most welcome article highlighting the fact that ‘trustees don’t seek advice upfront often leading to poor investment decision making which will attract the attention of the SRO’.

We urge you to take the view that if you are going to make an uninformed decision (which is unfortunately what most tend to do, putting emotion ahead of the financials) then perhaps you have an obligation as Trustee to your SMSF (and the Tax Office)  and thus take advantage of services such as ours prior to looking for your preferred investment property.

 

Does the property you are looking at have the correct Fundamentals in place?

The question is : “Are you giving yourself choice of an alternative solution to potentially make a better more informed and astute investment decision?”

An Investment decision that will benefit you by Thousands of Dollars. This is why more and more accountants, financial planners and mortgage brokers are now introducing their clients to services such as ours.

You will avoid the above pitfalls whilst we save you time, stress and probably money using our professional services, in working with you to help find what we call a ‘best fit’ investment property that matches your goals, investment strategy and overall SMSF and personal objectives.

 Did you know that securing a new property over an existing older one will result in your investment being thousands and thousands of dollars better off over the investment period?

See figures in example below :

SMSF Property

Increase the end value of your retirement by making an Informed Decision upfront

Your Investment  will be better off based on :

 demonstrating the above figures;   providing you with a selection of ‘best fit’ properties + due diligence and market reports on why these properties;   implementing our personal objectives of encouraging our clients to make an informed decision(using our industry knowledge, expertise and due diligence);  and inviting you to undertake your own due diligence on our recommendations.

  … the reality is that our system is deliberately designed to ensure that you will make more astute investment decisions!

  • than if you went to your local estate agent or a financial planner who is trying to flog you a property they have access to; both will tell you exactly what you want to hear so that you put down a 10% deposit and buy that property

 

Ask those in the know how you could maximise your Investment Returns

Our primary role is to explain how the numbers work, provide you with a selection of best fit properties that match your investment objectives, in your preferred locations (across Australia) and work with you so that you as the Trustee of your SMSF  make an informed decision whether that be a no or a yes, to options on the table.

There are other ways to perhaps achieve better results for your SMSF.

We look forward to your questions and feedback

Helping you grow your Retirement Value whilst exceeding your expectations of us. We assure you of our prompt and personal attention now and into the future.

 

Wanting to set up your SMSF?    Free consultationclick here

 

SMSF Property FundamentalsWhy a SMSF, tax advantages and Why an Investment Property…  more

 

Comments or questions are welcome.

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