Buying property through self managed super funds, with Munzurul Khan – Ep. 84

In this episode of the special end of year tax series, Mike is joined by Munzurul Khan, experienced property investor and Chairman of Chartered Accounting firm KHI Partners, to provide some insight into the complex world of Self-Managed Super Funds (SMSF) as an investment vehicle for buying property.

As an expert in SMSF’s, Munzurul is well placed to break down the fundamental information you need to know if you’re considering setting up your own super fund. Mike and Munzurul consider such questions as the minimum amount you need to get started, what it will cost you each year, and even what age is ideal to begin.

Munzurul explains why every super fund needs a Statement of Advice to get started, and lays out in clear terms the structure of an SMSF and what it can and cannot do. He outlines the three main benefits of having control over your own fund, and balances that by detailing the restrictions imposed on SMSF’s by legislation. Mike and Munzurul provide numeric examples to explain the rules around concessional and non-concessional contributions and talk through the tax implications when it comes to drawing down funds in retirement.

With tax time almost upon us, this is a great time to be thinking about planning. Munzurul is a firm believer in the Warren Buffett theory of focusing on what you understand and have passion for, and it’s clear from this conversation just how passionate Munzurul is about property, and SMSF’s as an investment vehicle.

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In this episode of the special end of year tax series, Mike is joined by Munzurul Khan, experienced property investor and Chairman of Chartered Accounting firm KHI Partners, to provide some insight into the complex world of Self-Managed Super Funds (SMSF) as an investment vehicle for buying property.

https://youtu.be/BlbXUWeDZBY

• The minimum amount you need to set up a super fund
• The importance of the statement of advice
• The running costs of a self-managed super fund
• The three main benefits of a self-managed super fund
• Focusing on investments you understand
• The legal entity of a super fund and what it can and can’t do
• The concept of non-recourse loans
• Drawing down super in retirement

“There is no one number in terms of how much you need to establish yourself managed super fund because it depends on what your investment strategy is, what you wish to do, how you wish to do” Munzurul 1:24

“Leverage is a bit of a double-edged sword, if we use it in the right way it does really good and if it goes into the wrong way it can have the same level of incremental negative impact as well” Munzurul 6:48

“My personal view is that while diversification has merit to it, of course it has got merit to it, where I struggle with the diversification on that concept is that you don’t have the leverage” Munzurul 9:20

“There is nothing against the shares, there’s nothing against management, there’s lots of my clients that have done exceptionally well with shares and managed funds, I stayed with the property because one is that I could understand” Munzurul 10:11

“The process is you need to have an independent financial advisor to review all of your finance and give you a statement of advice, whether super fund is right for you or not, how much the charge, it depends on which financial advisor” Munzurul 15:40

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