Steps involved in investing via SMSF

Written by Hein Preller , Posted in Property

Property Investment via SMSF

Hi, I’ve been reading on your website about investing in property within an SMSF and I have a couple of questions. My understanding of the sequence of actions required in order to make a property investment via an SMSF is as follows:

  1. Set up an SMSF through Superannuation Warehouse (I would only be setting up with an individual trustee to start with as I only plan to borrow 70% of the property’s purchase price).
  2. Open up a bank account;

Questions:

    • Do I need to tell the bank the purpose of this bank account?
    • Is this a special type of bank account?
    • Do I need to link this bank account to the SMSF?
  1. Roll over into the bank account opened in the above;
  2. Set up the bare trust (custodial trust) structure through superannuation warehouse;
    • Does the bare trust have to be set up before I can engage the brokers to find a suitable lender and get a pre-approval? Or is pre-approval of a limited recourse loan unconnected with the setting up of a bare trust?
    • Does the one-off fee of $950 cover all aspects of the bare trust set-up? By which I mean: does it include the stamp duty charged by the ATO for the limited recourse loan; or any other government charges?
  3. Get a pre-approval for the limited recourse loan from a lender;
  4. Find an investment property (residential);
  5. Proceed to seek formal approval for the loan and settle the purchase and the loan. Finally, as the property settlement can take up to 6 weeks from the date the contract is signed, I‘d just like to be sure that everything will go smoothly and that things like emails and requests will all be attended to if I engage Superannuation Warehouse as my SMSF administrator.

Look forward to your replay. Thanks & Regards

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Hein Preller

Hein is a Director at Superannuation Warehouse, specialising in setting up new SMSF's. Hein's company performs all the annual administration tasks consisting of preparing financial statements, lodging a tax return and arranging the audit.
  • superannuationwarehouse

    Your sequence of event is correct. You can choose any bank,
    including Macquarie:

    http://www.smsfwarehouse.com.au/smsf-bank-accounts/macquarie-bank/

    You don’t have to tell the bank the purpose of the account,
    but the account itself must be opened in the name of the SMSF.

    The bare trust is only set up when you’re sure about the
    property you want to purchase. The info we need is set out here:

    http://www.smsfwarehouse.com.au/smsf-investments/property/bare-trust/

    Remember, if you need a corporate trustee or custodian
    trustee, we charge $950 for each of these structure. So in the most likely
    scenario, it would cost you 3 x $950, for the bare trust and 2 pty ltd’s.

    I trust this makes sense.

    Regards Hein Preller, Director – Superannuation Warehouse
    03 86106999 (Office) 0411 241 215 (Mobile) smsfwarehouse.com.au

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