The cost of real estate property is increasing day by day, making it tougher and tougher for a common man to invest in this sector. However, experts say that there are several options that can be used in case a person is really interested in buying a property. One of these options is SMSF or Self Managed Super funds. On the other hand, investment gurus say that without taking the following points into consideration, it may not be a fruitful step to invest your SMSF in the real estate sector.
In case, you are planning to buy a property using your SMF, you should initially explore about the following options.
• What are the benefits of buying a property in an SMSF?
• Property is a stable and relatively low risk investment.
• Property can offer considerable returns on your investment.
• Property provides diversity within an investment portfolio.
• Positive geared property provides a passive income stream
• You have control over property and can increase value through renovations
There are several benefits of investing Self Managed Super Funds in buying a property and some of them are mentioned below.
• Property provides some tax benefits when held inside a SMSF structure.
• However, the rate of tax to be paid, the benefits as well as the terms and conditions may be different in your region.
• If a property is held for more than a year, the fund receives a one third discount on any capital gain it makes upon sale and yet again, you need to confirm about this at your local municipality office.
Is buying a property in a SMSF for everyone?
• In this regards, experts say that it is not a good idea for those who don’t have a large enough lump sum.
• This is because ideally, the fund should be large enough to support a property purchase.
• Other than this, it should also be capable of providing for unforeseen expenses and situations without distress.
