Many Australians are taking advantages of their SMSFs by investing in property for the future. Although it is not a get rich quick scheme, if you carefully plan and manage your SMSF investment, you can benefit greatly from the project. Once you have done all the hard work, you can then decide on your property. Here are some useful tips to help you make the best decisions.
SMSF loans are being used as long-term investment capital, helping to sustain many Australians through their retirement.
Many people are selecting SMSF investment properties to ensure it benefits both them and their families. To ensure they get the most out of their project, they must look for properties that suit their specific plans and provide longevity.
Here are 3 vital factors to consider when choosing an SMSF investment property:
Having enough money in your superannuation fund is a huge advantage over someone who needs to borrow to make an investment. You will be judged on your current situation, meaning a lender only considers your super contributions and expected rental income. If you cannot service a loan, you will find it difficult to get approved for SMSF investments. Because your super contributions are low, you will need your weekly rental income to cover the cost of the loan.
- Location of the Property
Location is always going to be an important factor when investing in any kind of property. Growth is generally safer when you invest in a place which is in or around a capital city. If the local economy is thriving, it is better to consider a growing community rather than a rural area. Having a property in a good area means you have a better chance of a high rental return.
You will be holding your property for a number of years with your SMSF, so you should be well prepared for maintenance issues that will occur during that period. It is best to invest in something that requires minimal work, so it does not waste your time and energy. Choose a new property in a stable area.
Investing in a property using a self-managed super fund is a great way to secure you and your family’s future. If you carefully plan your strategy, you will be able to find a property that works for you. When selecting a place, make sure you focus on the three key points mentioned above – yield, location, and maintenance.