Property investment through self-managed super funds (SMSFs) offers investors new opportunities
Australia’s super funds management market is the world’s fourth largest, with $1.4 trillion* in the system available to fuel property investment.
At September 2012, an estimated 44.3 percent of the $1.27 trillion in funds under investment managers was in the form of superannuation savings.
Self-managed super funds have outperformed the large managed funds consistently over the last 5 years. Growing numbers of Australians are turning away from commercial fund managers, whose fees must be paid regardless of performance. They recognise rising sun opportunities in their own funds in conjunction with professional property investment advisers like Portfolio Management Services.
Relaxed rules for property investment
Recent changes in Australian legislation have relaxed the rules governing investment opportunities. They’ve also boosted the incentives for building your property investment portfolio within your SMSF.
Portfolio Management Services can advise you on how to take advantage of the three key benefits arising from investing in residential or commercial property through your own self- managed super fund:
- Boosted borrowing power. You can repay borrowings from property investment income as well as direct super contributions.
- Better returns. The larger fund managers, with costly overheads and less flexibility, often lose money. Well managed investment property returns, like Portfolio Management Services’ return of more than 9.5 percent a year, offer attractive incentives to property investors.
- Tax benefits. Owning investment property through your SMSF rather than in your own name allows you to take advantage of lower tax rates from a maximum of 15 percent to zero when your SMSF enters the pension phase.
A word of warning
Few areas of life are without risk. Governments and legislation change.
Superannuation in Australia has a high profile and will continue to attract close attention from all sides of the political and economic arena, especially in an election year.
Always seek advice from financial and planning professionals before making investment choices, especially longer term decisions subject to changes in law or government policy.
Our long-standing relationships with qualified financial planners mean you can get accurate advice on the most effective property investment options open to you. The advice takes into consideration the many variables such as age, individual and joint income streams and tax liabilities, allowing you to make considered decisions.
Speak to Portfolio Management Services’ experienced property investment specialists on 03 9621 1044 for advice on how to take advantage of SMSF opportunities.
*IBISWorld, Australia’s renowned business tracker and trend spotter.