Superlatives can be used to upgrade rental properties

Superlatives can be used to upgrade rental properties

Australians looking to retire in comfort and safety can potentially turbocharge their retirement nest egg by investing in investment properties.

The founder of DDP Property, Zaki Ameer, suggests that investors use their superannuation as part of their overall investment goals when purchasing investment properties through self-managed super funds (SMSFs).

A mortgage now allows you to deposit 20% of your superannuation and 80% from the lender, says Ameer.

In the case of a $400,000 property purchased for $80,000 plus stamp duty and other costs, your super contribution would be around $100,000. Instead of the super funds contributed by your employer, you will be investing your entire super fund.

Over the past ten years, DDP Property has assisted more than 2000 clients with property purchases. According to Ameer, you should buy property in areas where there is high growth and demand, even if the area is far from your home. Read more about waterfront block

To avoid using superannuation or future employer contributions, he prefers lower-priced properties in growth hotspots that have high rental yields to cover all expenses.

In the past, we have helped clients find properties with a minimum super balance or combined super balance of $100,000. It is more important to be in the market for the long haul rather than timing the market.

The value of property has risen by nearly 15 per cent in Australia’s five largest cities in the past year, making property an attractive long-term investment.

The rent should cover all expenses associated with owning the property, and you should have all insurances in place – life, income, landlord, and home insurance all of which should be considered. Financial advisers can assist you in this regard.”

Ameer points out there are other costs to consider, such as setup fees for SMSFs and yearly tax filing and audit compliance, although he believes the long-term benefits should outweigh past capital gains.

When investors already have an SMSF but have not purchased a property within it, DDP Property, along with its financial planners and accountants, can help to create additional structures to assist with the purchase of an investment property.

Investing in residential property also gives investors access to an asset class they understand and trust while avoiding the volatility of other asset classes. Using your SMSF, you are able to access an initial deposit you otherwise would not be able to access.”

Investors who buy properties through DDP Property can also take advantage of a cashback program.

He says it is difficult to overcome the costs associated with commissions, marketing, and referrals. Over $25,000 is the fee for a brand-new $500,000 house and land package.”

Some of these fees are paid in cash by DDP Property to the buyers.

DDP Property charges buyers a one-time fixed fee to guide them through the buying process.

Following the purchase of your property, you can reinvest the cashback into your SMSF.

Investments can be made in property, shares, or any other SMSF-compliant investment class.”

Before buying a property with an SMSF, Ameer says it is crucial to get financial advice.

SMSF Association, the nation’s leading self-managed superannuation body, says trustees must carefully consider the investment strategy of their SMSFs and the circumstances of the investors before making investment decisions.

A strategy should specify how much exposure the fund should have to the property market, the type of exposure, and how appropriate it is for SMSF members, according to the SMSF Association.

There is no way to set and forget this problem. Auditors of SMSFs must make sure, among other things, that the SMSF has an investment strategy and that its investments are aligned with it throughout the year.