Researcher offers tips for SMSF property investment

Researcher offers tips for SMSF property investment

Melbourne-based property research advisers Nyko Property have outlined factors that SMSF trustees should consider to maximise their property investment.

 

Bill Nikolouzakis, founding director of Nyko Property, said SMSF investors should be looking for a property with relatively low maintenance requirements.

 “The tax advantages of an SMSF investing in property are minimal and the laws governing SMSFs do not allow extensive renovations that change the characteristics of the property,” he told nestegg.com.au’s sister publication ifa.

Mr Nikolouzakis said it is also critical to ensure the property will generate a strong yield of at least four per cent, especially if the trustee is servicing a debt.

“This does not mean you ignore its growth aspects, the main factor deciding the success of a property investment; it’s just that yield is more important when bought by an SMSF,” he said.

Mr Nikolouzakis also pointed out that while SMSF investment in residential property increased 17.2 per cent in the 12 months to March 2014, this growth is not necessarily “a disaster waiting to happen”.

“It comprises only 3.7 per cent of total SMSF assets of $558.5 billion. Of total SMSF investment in property, it is non-residential property that makes up 77 per cent of total property investment, at $68.4 billion,” Mr Nikolouzakis said.

“Borrowings, too, remain negligible at $2.8 billion or 0.5 per cent of all SMSF assets.

“When I see these numbers I draw a completely different conclusion. Quite clearly, a growing number of SMSF members want to invest in residential property. They probably know that historically it’s been a sound investment.”

Researcher offers tips for SMSF property investment
nestegg logo
Promoted Content
Recommended by Spike Native Network
Dr Terry Dwyer, Dwye... - Crocodile tears from the people who have driven land prices ever upwards with near zero interest rates? Where did these people learn economics?.......
Kevin - A very small investment in May/ June in Ethereum has literally made 2 million. And rising. Would have made more had I bought in March, but I needed.......
KateGan - This is our age of digital crimes... The only way to prevent such things is to raise the awareness about cybersecurity measures that every business.......
DavidL - Given that PPL is government funded, why doesn't the government foot the bill for the extra 9.5% - over the whole PPL period, not just 6 months? Why.......