Types of Properties Suitable for SMSF

Currently, self-managed super fund (SMSF) is quite popular for property investment, as it can help collecting money for your retirement day. It is a type of superannuation scheme that puts the beneficiaries as members. In fact, there are several kinds of property which are affordable in SMSF, such as houses and units, houses and land packages, Dual key properties, serviced apartments, and commercial property, but we will discuss the three most common types of investments which many people wish to have when their twilight years arrive.

  • Established houses and units

If you already have your favorite property, house, unit or townhouse that you might want to live in or you can simply purchase them through your super. You don’t need to buy a new or unusual property. Since the latest rulings by the ATO, investing in older properties has become less of a hassle, which permits extensive repairs to be carried out to SMSF properties; this surely helps reducing the burden of home owner or tenant.

Same as any SMSF investment, you can choose your favorite location if your fund can cover the property’s entire value. However, if you are borrowing, it will be better to consider the fundamentals: a good location with growth potential, quality tenants and a tight rental market with a healthy enough revenue to cover your repayments. As your super income does not allow you to invest in prestige market, unless you have a high salary, in this sense property in middle ring city suburbs will be better.

  • Serviced apartments

Due to high promised returns, serviced apartments are popular with some SMSF investors. Besides, more than 60% of buyers are prefer to buy via self-managed super funds which reflect the market. The interest may arise due to the guaranteed rental yield of 6.5% and an annual incremental rental increase of 4%, plus the offer of 100% tenancy.

Serviced apartments are similar with McDonalds’ property. Since Super assets were supposed to provide regular income with low volatility which can be used as a pensions support, as you’ve got as an asset that can produce income and allow pensions to be paid without the need to sold the property.

  • Dual Key Properties

Having two or more separate dwellings on a single title can gain you double or triple revenues, and even more. This type of property is likely found around capital cities and it mostly offers higher rental yields. Since they are on one title, so you only own one property and there’s no problem with the single asset rule. However, selling Dual Key properties may be more difficult rather than selling other types of property, as it only attracts fewer potential buyers.


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