{"id":21806,"date":"2018-07-16T01:00:21","date_gmt":"2018-07-15T15:00:21","guid":{"rendered":"https:\/\/realestatetalk.com.au\/?p=21806"},"modified":"2018-07-16T01:00:21","modified_gmt":"2018-07-15T15:00:21","slug":"setting-up-a-property-in-a-smsf-ian-rodrigues","status":"publish","type":"post","link":"https:\/\/channels.realty.com.au\/realtytalk\/setting-up-a-property-in-a-smsf-ian-rodrigues\/","title":{"rendered":"Setting up a property in a SMSF \u2013 Ian Rodrigues"},"content":{"rendered":"

We are developing a series of videos in conjunction with our show partners \u2013 Your Investment Property \u2013 that deals with property in a Self-Managed Superannuation Fund (SMSF).\u00a0 \u00a0What works best, avoiding the pitfalls and the pros and cons.\u00a0 You will find more about the videos on the YIP Featured Channel on the Real Estate Talk website but today Ian Rodrigues<\/strong> gives us some interesting stats about the trend and who can benefit \u2013 it is not for everyone as you will hear.<\/p>\n

Transcript:<\/strong><\/p>\n

Kevin:\u00a0\u00a0<\/strong>A few days ago, we released a video on the\u00a0Your Investment Property<\/em>\u00a0channel. It\u2019s a video that I did with Ian Rodrigues from Bishop Collins in our continuing series as we look at self-managed superannuation funds.<\/p>\n

There are a lot of facts that you need to get on top of if you\u2019re looking at doing this for yourself, so I wanted Ian to come and join us in the show just to talk a little bit more about that, and maybe point you towards that video. So, go to the\u00a0Your Investment Property<\/em>\u00a0channel website on Real Estate Talk and you\u2019ll see that video there. It goes into a lot of detail. And by the way too, we give you a download opportunity to get a lot of these facts for yourself.<\/p>\n

Ian, thanks again for your time. I wanted to have you in the show just to give that a little bit more exposure, because I think there are some key points we need to cover that will help people understand whether or not putting property in a self-managed superannuation fund is for them, because as you pointed out in the video, it\u2019s not for everyone, is it?<\/p>\n

Ian:\u00a0\u00a0<\/strong>Definitely not, Kevin. There are a lot of these funds around. There are around 600,000 of them in the country in the moment, constituting over 30% of all superannuation money. Those are enormous numbers, and it\u2019s been growth year on year that\u2019s been coming there. But I am adamant that they\u2019re not for everyone.<\/p>\n

Kevin:\u00a0\u00a0<\/strong>No, they\u2019re not. And that\u2019s evidenced too by one of the stats that we give you in that video, and that is that about 11,000 to 12,000 funds are actually wound up every year. And I think you said that that\u2019s probably the result of people realizing this is not for them.<\/p>\n

Ian:\u00a0\u00a0<\/strong>Yes. In my experience, some of those funds in theory could be people getting to the point that the members have died and the funds are wound up \u2013 there would be an element of that, but in our experience, there are a lot of people who have set these funds up, they\u2019ve jumped on the trend, everyone\u2019s got one, maybe they\u2019re keeping up with the Joneses, and when you look at it, you think \u201cWell, why do you even have this? You don\u2019t have enough money in it, you don\u2019t really want to make decisions about where to invest the money, and it\u2019s not big enough to really justify the cost of running it.\u201d<\/p>\n

Kevin:\u00a0\u00a0<\/strong>The cost of running it and also the cost of setting it up. So, if you do set one up, it\u2019s not easy, it takes time, but it also takes money, and then if you wind it up in a year or two, you really have lost a fair bit of money, Ian.<\/p>\n

Ian:\u00a0\u00a0<\/strong>Absolutely. And I think the danger with these things is that people haven\u2019t thought through before they do it what\u2019s involved in running it. It can be easy for the member because it\u2019s easy to make your accountant or financial planner set it up for you. You just write them a check and fill in some forms and away you go, you\u2019ve got the keys. But they are complicated.<\/p>\n

There are a lot of obligations, and your advisors should be looking after all of those for you, but it does mean cost, and the cost is really great when the fund is big enough, but the cost is very fixed. So, when the fund is small, it can be quite a big number.<\/p>\n

Kevin:\u00a0\u00a0<\/strong>Yes. How big are the funds generally? What\u2019s the average size?<\/p>\n

Ian:\u00a0\u00a0<\/strong>There are funds ranging everywhere, but the average size of a fund is over $1 million now. And the typical member is in their 40s, so they\u2019re still in the accumulation phase. This is a massive growing part of the market. There are funds that are still in growth phase. There are net new funds every year of around 20,000 or 25,000 funds \u2013 net of closedowns.<\/p>\n

We\u2019ll be looking at this in another five years and it won\u2019t be 30% of super money; I\u2019d suggest it may be a lot more than that again.<\/p>\n

Kevin:\u00a0\u00a0<\/strong>We\u2019ll do a \u201cword to text\u201d of this interview, so just scroll down, and I\u2019ll make sure that our producer puts a link to that video, because in the video, we offer you the opportunity to download a whole lot of material about this so that you can become more educated yourself before you can go and see your own accountant about whether or not you should do this.<\/p>\n

All of that comes, of course, from Bishop Collins. They\u2019ve actually supplied that to us. A lot of the information came from the ATO I believe, Ian. Is that right?<\/p>\n

Ian:\u00a0\u00a0<\/strong>That is correct. The ATO put out some great numbers, and for people who like the numbers, there\u2019s a lot of data in there to digest. For the accountants, we love it, we look at it every year, but it does tell you a lot about funds. They have some good guide books if you\u2019re an aspiring trustee, and if you are a trustee, you\u2019d probably read them and give yourself a sleepless night.<\/p>\n

But it isn\u2019t that bad. The point I make is it is complicated, it is difficult, there are lots of rules, but that\u2019s not for the members to worry about. They just need to know the most important stuff to not do, and their advisors need to look after the rest.<\/p>\n

The biggest concern the ATO have with these funds is people taking their money out of it before retirement age, so basically lending money to themselves. That happens on a small scale relative to the size of the market, but it is the major concern the ATO has.<\/p>\n

Kevin:\u00a0\u00a0<\/strong>Okay. An opportunity, once again, go to that link, watch that video that I did with Ian. A lot of information inside the video. It runs for about 10 or 12 minutes. But also opportunities to download some links and get a lot more information for yourself.<\/p>\n

Ian Rodrigues has been my guest from Bishop Collins. Ian, once again, thanks for your time.<\/p>\n

Ian:\u00a0\u00a0<\/strong>No problem, Kevin. Our pleasure.<\/p>\n","protected":false},"excerpt":{"rendered":"

We are developing a series of videos in conjunction with our show partners \u2013 Your Investment Property \u2013 that deals with property in a Self-Managed Superannuation Fund (SMSF).\u00a0 \u00a0What works best, avoiding the pitfalls and the pros and cons.\u00a0 You will find more about the…<\/p>\n","protected":false},"author":176692473,"featured_media":21801,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[32,33,10,11,13,35,36,17,18,22,25,27,31],"tags":[101],"class_list":["post-21806","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-buying-a-property-topic","category-case-studies-topic","category-kevin-turner-sponsored-channels","category-kevin-update","category-latest-story","category-property-development-topic","category-property-investment-topic","category-property-investment","category-property-management-topic","category-research-topic","category-sponsored-channels","category-trends-topic","category-your-investment-property","tag-podcast"],"yoast_head":"\nSetting up a property in a SMSF \u2013 Ian Rodrigues - 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