How to select an investment residential property
by Wealth Know How in Property
If a property investment is right for your SMSF, then this video may help you understand what are your choices and very importantly the rules governing this kind of investment. There are many issues, including being able to demonstrate you've 'done your homework' before buying, click on this video to find out more.
- sponsor - Wealth Know How
Wealth Know How is the online network helping people manage their wealth through financial education. Whether you are looking for simple ways to better manage your cash, or you are after a complete strategy on how to save for retirement, we can help you understand your options. It is important to have a vision for your future, but its knowledge not dreams that will ultimately deliver financial success.
Published on 13 Jan 14
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If a property investment is right for your SMSF, then this video may help you understand what are your choices and very importantly the rules governing this kind of investment. There are many issues, including being able to demonstrate you've 'done your homework' before buying, click on this video to find out more.
Sponsor - Wealth Know How
Wealth Know How is the online network helping people manage their wealth through financial education. Whether you are looking for simple ways to better manage your cash, or you are after a complete strategy on how to save for retirement, we can help you understand your options. It is important to have a vision for your future, but its knowledge not dreams that will ultimately deliver financial success.
-
Venezuela tension heats up
Duration 03:16
-
Aussie dollar surprises market
Duration 03:10
-
Markets climb as investors watch US healthcare bill
Duration 02:31
Common residential property investment choices include houses, units and apartments. There are strict rules to with comply with when buying property for a SMSF. For example you are allowed to buy off-the-plan, but you cannot buy vacant land and then build a house. If you’re borrowing, there can be no alterations that change the character of the property until the SMSF property loan is paid off.
Therefore, it’s safest to stick with residential properties that are ready to rent, as these can be justified as investments that will meet the investment objectives of a SMSF.
As prudential research into the property (and the property market) in the area where you are buying is required, it may be best to use a licensed advisor to assist so you can demonstrate that your fund has conducted this research before buying.
Three important attributes to think about are location, yield and maintenance needs. Ideally, you should look for a reasonably new property, in a good location, with a healthy rental market and a diverse employment mix, which will help you attract a high quality of tenant. The property should also have strong long-term capital growth prospects and a relatively high rental return.