self managed superfund

Hi, we have recently opened a self managed super fund, with just under $100,000 in it, we want to invest it in something but not sure what the best option is. Originally we wanted to invest it in property but I have heard there is more involved than just buying and paying it off, can someone help me out and explain how it all works, or any ideas on a good investment would be much appreciated.

Thanks

Hi

If you were looking to borrow you need to fully understand section 67 of the SIS Act which relates to Limited recourse Borrowing Arrangements (LRBA).

As Rambler said you really should seek proper professional advice as to whether this type of strategy is right for you.

In general terms LRBA's are available from most of the major lenders however all lenders are not the same with borrowing requirements and fees charges generally higher than a normal mortgage.

For example maximum borrowing ratio is generally 80% for residential property for a LRBA with variable interest rates around 7% pa although there are some fixed rates around at 6.5% pa and lower.

Whilst this may seem OK the costs involved to establish such a borrowing can be up to $5,000 for an average property depending on a few things.