How can SMSF investors get the best return through property?
Anthony Wamsteker, Director, SMSF Property Australia:
We think of property as having two distinct categories of investment. There is the typical property investment where you buy the property and hold it for a long period of time and hope to earn rent and over time the property goes up in value. Still that's probably the biggest type of property investment there is.
But there is another type of property investment where you do the property development so you manufacture the end product, if you like, by buying the land, contracting with the builder to build on that land then create the product and then sell the product at the end for the profit. So that's typical property development.
But what we've done is we've put that property development inside a managed investment scheme so its accessible to retail investors and most importantly we've done it in a way that there is no debt in the model and so probably one of the big risk in property development has always been the amount of debt involved for the first time we're able to offer property developments) with no debt at all so there's no risk of bank foreclosing if there’s any difficulties as we go through the development process.
How can investors make sure they are in compliance?
So what we've done is we've established structure which is regulated by ASIC, the Australian Securities and Investment Commission. And through that structure people are able to make an investment that is fully compliant under superannuation law.
So they don't have to worry about it if they invest one of there managed investment schemes that has already been signed off if you like as part of the process of getting out of managed investment schemes approved by ASIC.
Find out how much you can borrow using our SMSF calculator