(Newswire.net — September 4, 2015) — The following release is the latest to the chad chiniquy real estate investors informational press series 2015.
Self Managed Superannuation Funds are quite simple and easy to understand once properly explained.
Rather than paying contributions to a specific industry fund, consumers need to pay it to a fund which can be run privately, the consumer is the one to choose what to invest in, and this can even include direct property.
Here is a step by step guide to set up an SMSF in 2015.
Revisit Deed and Investment Strategy
If a real estate investor has already set up a Self Managed Superannuation Fund, the first consideration should be the investment strategy.
A Self Managed Superannuation Fund can use only borrowed money to purchase a property. However, this investment strategy needs to be properly outlined in both the investment strategy statement and trust deed.
Obtain Loan Pre-Approval
Earlier, SMSFs were not allowed to borrow any money. However, there have been some recent changes to the law. These changes permit SMSFs to borrow money under some special circumstances. A Self Managed Superannuation Fund allows you to purchase income-producing, eligible property.
Find a Property
Every SMSF investment should be planned for the primary purpose of providing exceptional retirement benefits to members. The property must be established. A Self Managed Superannuation Fund can’t refurbish or develop an existing property. It can’t even purchase a vacant land for development.
Set Up Security Trust
Until the Self Managed Superannuation Fund has paid the loan in full, the legal title will be held in a bare trust. Once the loan has been pre-approved, the trustees will have to set up this security trust. The trustee of a bare trust should be independent of the Self Managed Superannuation Fund trustee.
Reach Settlement
Once the loan has been approved, legal structure has been set up and funds are also available, it is possible to execute the contract of sale. Lawyers will prepare all the legal documents and send them to the Self Managed Superannuation Fund’s appointed conveyancer. These documents are signed and returned to the primary borrower.
Manage the Property
The Self Managed Superannuation Fund also needs to manage the asset and even pay all kinds of bills, including water rates, council rates, property management fees, land tax and insurance premiums. It is important to understand that trustees have complete control over renovating, selling and leasing decisions.
Gain Legal Title
Last but not the least, the SMSF needs to gain legal title. The Self Managed Superannuation Fund can pay the entire loan any time. However, the loan product and particular lender should allow it.
Once the entire loan has been paid, legal title can be easily transferred to the Self Managed Superannuation Fund. Even the property trustee can act as a Registered Proprietor.
The Self Managed Superannuation Fund can also direct a property trustee to sell the property to some other party. However, if the borrower waits until the SMSF is in pension phase, the borrower will enjoy significant tax benefits.
Chad chiniquy is a real estate investment training teacher with 20+ years and over 100 million dollars of real estate investing
experience, to learn more about chad chiniquys find,fund,flip, systems or to book a seminar visit: http://www.chadchiniquy.com