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DIY Super Fund owns 100% of the Property
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- SMSF is created for you
- You roll over all your and other family members (maximum 4) existing Super Funds in your DIY Super Fund
- Investment Property is purchased in the Trustee's name acting for your DIY Super Fund
- Rate of Return can be modest (4% to 9%) Plus there is a possibility of growth
- Properties may be purchased overseas
- Properties can be bought in regional areas (www.propertyguide.com.au)
- Land can be bought and when more funds accumulate a house can be erected on it
EXAMPLE
Assuming $400,000 Property is purchased,
| Rent Income (Assume $350 Per Week) | 18,200 |
| Cash Expenses (rates, agents fees etc assumption) | 2,500 |
| Depreciation** | 7,500 |
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**
Capital Works $175,000 depreciated @2.5% and Plant $30,000 @ 12.5%)
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| Total Expenses | 11,000 |
| Taxable Income before Income Tax | 7,200 |
| Income Tax @ 15% | $1,080 |
Cash return of $13,620, which is 3.4% of investment. Plus growth in value of investment, say 6.6% per annum. Total return on capital of 10%.
(*Like any investment it is possible to have a negative or nil growth in residential property, as growth depends on timing of purchase and sale of investment - however, historically, residential property has grown over a long period).