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Is smsf really worth at this time?

Notify me of new replies via email | 21 Jan 2020, 03:22 PM Agree 0
Just wondering
  • Jason | 17 Feb 2020, 11:36 AM Agree 0
    Investing in property through a SMSF can be worthwhile.
    SMSFs are one of the fastest-growing retirement investment structures, and they’re now officially outperforming other types of superannuation funds.

    I'll outline some of the benefits & key considerations:

    Potential to maximise returns through salary sacrifice
    Repairs and improvements to increase the value of the asset (doesn’t apply to other asset classes)
    Combining super with a family member can increase purchasing power
    Lower tax rate – superannuation income is taxed at 15%, and superannuation capital gains are taxed at 10% – and in the retirement phase there’s no tax at all.
    Leveraging capability - when purchasing property through an SMSF, individuals can secure finance of up to 70% of the property value, provided they meet the lender criteria. This means they only need to invest a small amount of their funds in the property.

    Key considerations:
    There are specific rules around investing this way that need to be followed
    There a few key risks – negative cash flow, lack of diversity in your portfolio, underperforming properties, and financing costs. As with any investment, fluctuations and their impact on after-tax cash flow all need to be considered.

    While every investment carries risk, it’s hard to ignore the advantages of leveraging super through direct property investment.
    If you'd like to chat further about your specific situation and whether you may be in a position to invest in property through a SMSF, you can give one of my Property Coaches a call at 1300 728 838

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