A friend suggested I invest my cash savings into my own SMSF to help with the purchase of an investment property? Is this wise and how can I get my cash back?

Hi Lucia,

There are a million questions to determine if this is even a remotely sensible idea.

I would hazard a guess and say it's probably not and best to not get financial advice off friends.

Cheers

Glenn

Hi Lucia

SMSF is like any super and you cannot recoup funds until you reach the age you can have access to your SUPER

I can introduce you to a SMSF expert who can set the fund up and all the side bar requirements

In a SMSF their are a few legislative matters to be mindful

In residential housing .... neither you or any beneficiaries are able to reside in the property

Where as in a commercial situation you can be a Tennant of the Fund

Loans are available BUT rates , terms and conditions can vary dramatically with various funders so a Professional Broker can secure the variances for you to be able to make an informed decision

Most brokers do NOT charge for a loan profile and application/ submission

Call me on 0411 696 696
If you needed some more intricate information

Cheers
Rosco

Hi Lucia,

I’m with Glenn there’s a million questions to ask to determine if this is a sensible idea or not.

There is actually a way you can use your cash to purchase and have it paid back to you over time - but it’s complicated.

Start with a conversation with a financial adviser to work through of this is appropriate for you or not.

Regards
James

Unless your friend is an expert who is currently actively advising people in super and tax then I would treat his advice the same as anything you hear at the pub/bbq/cribroom/water-cooler.....with a massive dose of skepticism.

The idea is technically feasible, but there are a lots of ifs buts and maybes before you can say its a good idea.

go see a professional. pay for some good advice and be wary of shysters.

good luck
bc

Hi Lucia

As mentioned above, I would be very cautious in getting financial advice from friends unless they are experts in the field. Best to speak to a financial adviser first. There are many rules & regulations and the running costs of the SMSF can cut into your retirement savings.

If you have cash savings, is there anything stopping you from getting an investment loan without borrowing through a SMSF? I also do SMSF loans but just curious as to why your friend would advise you to do that.

Feel free to contact me if you'd like to chat, happy to offer you some guidance.

Kind regards
Caroline Pollard
cp@baysidefinancesolutions.com.au
0418109552

Hi Lucia,

Setting up an SMSF to purchase an investment property can be a great idea depending on a) setting up the fund correctly in the first place and b) choosing the right type of property.

People generally go down this route because they understand how property works more then they do with shares.

Being able to set one up very much depends how much you have in super right now because banks have lower LVRs and liquidity rules for SMSF loans.

I've actually written an article about this topic which you may find interesting - https://www.multipartfinance.com.au/blog/2017/10/5/how-to-buy-property-through-super

Kind regards,

Tim Russell
0400 530 868
tim@multipartfinance.com.au
www.multipartfinance.com.au