House prices in Australia are among the least affordable in the world. Some markets are pricier than others, like Sydney, for instance, which is less affordable than Perth. Properties in Sydney are said to be worth 12.2 times the average household income. This situation tells you a lot about the financial world you live in and how it can serve as an advantage.
Basics on Inflation and Real Estate
Goods and services, of course, cost less during your parents’ time. While rising prices are disadvantageous for consumers, it is profitable for real estate investors. This is because the resale value of real estate increases over time and generates more income. Just as the value of the property increases, so do rental prices. Property investment, meanwhile, keeps pace with the price hike.
Investment Strategy with SMSF Commercial Property
Using a self-managed super fund (SMSF) to buy a commercial property is becoming increasingly popular. SMSF use borrowed money to purchase an asset that has the same market value. The trustee receives a beneficial interest in the purchased asset but the legal ownership is held on a trust.
Sentinelpg.com.au says, self managed super funds property investment is an excellent way of achieving your investment property goals while increasing retirement savings with long-term returns and capital growth.
Tax Advantage of SMSF Property Investment
The investment gives a tax benefit of as much as 15% for rental payments. If your SMSF is provided in the pension phase, you will not have to pay the tax.
Other advantages and benefits include gaining control of your investment and superannuation, buying and renting back your SMSF commercial property investment, and accomplishing diversity within your SMSF.
There are many advantages of SMSF when investing in property. But these come with strict compliance and regulations. With advice from industry experts, you can make use of the economic situation today to your advantage and secure a financial foothold for your future.