Buying a property in a Self-Managed Super Fund is a great way to optimise your retirement income – but there are important things to look out for when choosing the property, write Kelvin Gough and Gary Kosover.
When it comes to investing in property via an SMSF there are plenty of benefits. For one, there are some very attractive tax advantages that come with investing inside super compared to non-super investments. That said, without the correct investment property in the fund, it could turn out to be a waste of your precious time and money.
SMSF investment property at the right price in the right area can be a wonderful match made in heaven. There are however, some things you should look out for when choosing a property investment via your superannuation.
Firstly, you want the property to be low maintenance. We recommend you buy a new property in top-notch condition so that it costs you very little time and effort to maintain.
Buy a house and not an apartment. You can charge more rent for a stand-alone home and then pay off your loan more rapidly. The land component provides the main portion of the capital growth, the land component doesn’t exist in an apartment. Buy property with low vacancy rates. You can do this by investing in high quality property with premium fixtures and fittings. Quite simply, if there’s no tenant there’s no rent. And lastly, make sure you engage someone who manages the estate agent; to ensure your property remains in great condition.
It’s also a good idea to buy property in a high growth area that will offer you maximum capital growth. The good news is that we have identified the outer south eastern suburbs such as Berwick, Cranbourne, Officer, Pakenham and Drouin to have the most potential when it comes to future capital growth.
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Kelvin Gough is the Manager of Safe Super Homes
Gary Kosover is the Accountant at Safe Super Homes
This article contains general advice only. Before acting on it consult qualified professionals. If you require specific property investment advice call Gary Kosover, Chartered Accountant 03 9702 2595 at Safe Super Homes, 26 Moondarra Drive, Berwick.