Self-managed super funds (SMSFs) are the hot topic at the moment, and they can be a powerful structure for property investing, yet they can also be complex. However, there are some quick and easy early-on steps that will leave you in good stead.
It’s increasingly a younger crowd looking to self managing their super, according to Heffron’s Mark Wilkinson.
He explains that “There’s certainly more people in the 55 to 70 age group that have got them but there’s an increasing number of young people setting it up.
“[Having a] self management fund is being control of your own destiny,” he says.
However, he urges that there are certain skill sets found in those that do well with SMSFs. “The successful ones will seek out advice. Whether it goes together with the nature of individuals that set them up in that they want control or they know anything, certainly those that make success will get advice when they need it.”
Luckily, with the four-day Easter break, many investors now have valuable time they can spend educating themselves, getting organised and looking for advice.
First things first, head to the Australian Taxation Office website and read through their free guide and resources.
This guide includes: An SMSF Overview, including everything from setting it up to record-keeping, and managing the investment. There’s also a section on whether or not you should be investing in an SMSF.
This was the topic of Smart Property Investment’s first feature in our new SMSF section (for those of you who have picked up a copy, turn to page 64 ‘Is an SMSF right for you?’).
You can also find calculators, forms and tips on the ATO website on that page that are an invaluable starting point to anyone coming in fresh to SMSFs.
ASIC’s MoneySmart website also has some easy-to-understand information that is worth a read, spanning how it works and those frequently asked questions we’re always hearing.
It’s also worth getting your hand one at least a couple of a number of investment books available. We recently reviewed Martin Murden’s How to invest in property through your self managed super fund and will be reviewing a number of other books over the coming weeks.
Managing director and CEO of Open Corporate, Matthew Lewison, who co-wrote ‘My Four-Year Old The Property Investor’ explains that this is not going to be the best option for investors who are unwilling to take the time to learn the basics.
“A lot of people don’t even understand that their current superannuation includes life insurance and suddenly they set up an SMSF and are uninsured,” Mr Lewison says of one pitfall that many fall into due to lack of research and understanding.
A first point of call would be an accountant, whom you should ask for upfront fees, he advises.