Home / SMSF Investment Know How / Return on Investment Examples

Which Properties are Investment Grade and better suited to my SMSF investment strategy?

Which propety suits a SMSF



As you may be aware, not all properties are created equal!


What this means to you is that only a small percentage of properties available make for a sound Investment for you.


In a SMSF one needs to also take into consideration the following (this is NOT tax advice) :

    • A SMSF is taxed at a maximum rate of only 15%
    • Most SMSF's earn very little income from their investments
    • Meaning one can only deduct expenses against a taxable income, and in your SMSF, the only income will come from rent or interest / dividends, which are the funds not invested in your property
    • The result is that most of your outgoings will not be deductible, and therefore your gearing (negative cash flow) could be a lot higher than if you owned the property outside of Super


It thus makes Investment Sense, to buy a Property with a Higher Rental Yield, which is in a Capital Growth Location !


What this means to the astute investor wanting to take advantage of all the other benefits of Investing in a Property in Super is :

  1. It makes financial sense to secure a property in a sound location where the Rental Yields are higher
  2. The higher the rent, the more improved your overall, end benefit, Retirement Savings will be
  3. The property may not be where you live, which is OK as it should be viewed purely as an 'investment vehicle'
  4. If you can secure a property which meets your investment strategy, with a higher rental yield + capital growth, this is first prize for your SMSF and ultimately for your retirement lifestyle



See table below for demonstration purposes only clearly demonstrating how a higher rental yield will positively effect the end benefit the outcome of your Super

Comparing Rental Yields in a SMSF[The above is calculated using the following : 5.5% interest only; 20% deposit; $10k contributions to SMSF; Including (management fees, insurance, rates, body corp etc); Including (depreciation benefits); 5% capital growth, 3% inflation - once again for demonstration purposes only to give you the general idea that a higher rental yield positively effects the outcome of your retirement planning]


"Not all properties are created equal nor suited to a SMSF !"


Based on the above examples it makes financial sense to identify which property is more suited to a SMSF, which will return you a higher return on your investment, and in a location with capital growth opportunity ... you will agree. This could mean an extra $1 000 000 (1m $'s) more at retirement for you and your family.



"Live the life you deserve and want for yourself!"



Ask us where we have identified properties to suit SMSF investment strategies, complete the form below ?


Retirement in a ball

Comments or questions are welcome.

* indicates required field