According to Yannick Ieko, founder and CEO of NDIS Loan Experts and SMSF Loan Experts, the festive season is usually the time when most people review their financial circumstances and look to the new year to put in place new goals and exciting new projects.
“Many people are looking intensely at their financial situation and thinking about the future.”
“They are now firmly fixated on how they are going to spearhead their wealth and grow their financial base in the face of a persistent pandemic. Much of the feedback from our clients suggests that investors are looking for more aggressive ways to grow wealth.”
“There is no doubt that property continues to be a star investment performer during the pandemic with certain types of property delivering even better returns than others.”
“NDIS approved dwellings fall into this category. They are delivering returns of up to 20% per annum for revenue alone. The capital gains are on top of this. This is why many investors are looking at including NDIS properties in their wealth creation strategies this year.”
“Self-managed super funds are an attractive way to achieve this.”
“With the changes that happened last year enabling self-managed super funds to increase members from four to six, this has provided opportunities for people to set up self-managed super funds with friends as well thereby growing the funding capacity.”
Here’s why setting up a self-managed super fund with friends may be an option.
More funds to pool
“What most people don’t know is that self-managed super fund membership is not restricted to family members. Members don’t have to be related.”
“Six friends can set up a fund together and roll all or part of their superannuation funds over into the self-managed super fund thereby increasing the pool of money with which to invest.”
“For property purchases, especially NDIS and larger commercial purchases, there are benefits to be leveraged and harnessed by organisations which are having more funds.”
More heads, more diversity
“More heads in a self-managed super fund brings more diversity.”
“The beauty of having your own self-managed super fund is that you have control over where your money goes and you can put it into interesting and quirky investments,” Ieko added.
“Whether it be crypto, new startups, NDIS properties or equine sperm, the scope for investment with a self-managed super fund is huge, provided you work within the ATO’s rules.
“Set up a good trust deed at the outset and ensure you have an investment strategy in place.”
“There is absolutely no doubt that self-managed super funds facilitate and offer significant tax advantages when compared to other commercial structures. Self-managed super funds pay a maximum of 15% in tax but often less, down to zero,” Ieko emphasised.
Increased borrowing capacity
“With more members, this increases the potential for the self-managed super fund to borrow more money. With more money, you can purchase more income producing assets.”
“By being strategic with your membership, you can roll more money into the fund and also increase the number of guarantors and people able to contribute to interest payments.”
Members have their own balance account
“Systems can easily be set up to avoid issues over who gets what. Each member can have their own member balance account that captures and tracks contributions, earnings and expenses.”
“Because of how self-managed super funds are treated, they are protected when it comes to bankruptcy as long as funds haven’t been deliberately paid into the fund to avoid creditors.”
We are going to see more people coming together to set up self-managed super funds in order to grow wealth through the purchase of larger-scale investments like NDIS properties.
“The key is to ensure that people do their homework and put the right fundamentals in place.”
Yannick Ieko is the Founder and Managing Director of NDIS Loan Experts and SMSF Loan Experts that have been providing the market with loans and guidance for lending for years.