Superannuation & Investment.
MY MOTTO............ "If I wouldnt buy it for my own super fund....I certainly wont recommend you do!"
Over the last nine years, especially since the relaxation on restrictions to direct investment in income producing property by superannuation funds, it has been my pleasure to source, evaluate, recommend and acquire suitable investment grade Residential, Commercial and Industrial property, as these funds sought to diversify risk and individuals moved to broaden their investment portfolios.
Most acquisitions have been for smaller, Self Managed Superannuation Funds who since the peak of the Stock Market in late 2007 and subsequent fall approximating 47% by early 2009,[ and, its continuing "less than stellar performance" and only recent recovery through the 5900 level, are very pleased with these income producing, "defensive" investments & their very substantial recent capital gains, as opposed to those who's retirement funds were not balanced and entirely share market based.
Since the ATOs clarification of the Rules for SMS Funds property ownership its now clear; YES, you can buy residential and commercial investment property; YES, you can borrow up to 80% for a residential property and up to 65% for a commercial property[ Banks & APRA permitting!]; YES, you can lend money to your SMS Fund to buy property but, NO, you cannot transfer a residential property already owned into your SMS Fund.
Some of the obvious benefits now available include better control over investment strategies and more efficient estate planning; Wider investment choice and available assett protection; No income or capital gains Tax in retirement, provided the assett is held for more than one year; The structure necessary to hold property in your SMS Fund limits the liability for borrowings to that property and not the family home; Negative gearing counters contrabution Tax etc
My successful acquisitions include residential apartments in near city areas of proven high demand, "lock up" shops in established strip shopping centers, [especially those that could be further developed into a retail and a residential tenancy with two income streams], near city factories and warehouses which are virtually a "let and forget" proposition, suburban strata offices and freehold Hotels now let on long term leases to competent publicans and showing excellent returns.
A few of the attractions for fund trustees, managers and private investors with income producing property in their portfolios include low management fees when compared to [listed] managed or industry funds, a far greater measure of control of the investment and a heightened sense of security of ownership in comparison to stock market volatility, depreciation allowances etc....not to mention regular income and measurable capital gain.
However," not all property is good property" for superannuation or personal investment and not all forms of investment in the property market by individuals or superannuation funds has proven to be prudent or profitable!
I refer of course mainly to indirect property investment through AXS listed Property Trusts whose performance overall last decade has ranged from dull to disastrous![ I will not even comment on some of the superannuation "Train Wrecks" and its long term social consequences left by so called "Financial Engineers"]; Frozen or destroyed listed and unlisted property, share and mortgage funds under the banner of City Pacific, Centro, Storm Financial, Premium and Howard readily spring to mind [ and should not readily be forgotten!] .
So, if you are in the fortunate position of managing your own Superannuation Fund or investment affairs or a professional who advises and manages such funds and believe a "small ticket" income producing property would add balance and profit to a particular fund, but lack expert Real Estate qualifications and acquisition experience, "MAY I BE OF ASSISTANCE?"