INVESTING IN RESIDENTIAL VERSUS COMMERCIAL PROPERTY
One of the chapters in the ‘Building Wealth in a Self Managed Super Fund’ book explores the differences to consider when looking to invest in residential property or commercial property. Coral acknowledges that property investment can feel overwhelming and daunting and that each investor will have their own story on what works for them. With each investment strategy, it is vital to assess your own strengths and weaknesses to find the investment that best fits you.
I discovered through leveraging to buy property in our SMSF, weekly/monthly rentals derived from these properties are taxed at 15%. We can see our fund growing exponentially even if we didn’t make any personal contributions to our fund.
Residential Property to house individuals and families
Income
- Usually 6-12 month lease
- 4 weeks bond (rental bond board)
- Income (rental) + utilities
Expenses
- Tenants do not pay any outgoings
- Rates
- Insurance
- Land Tax (if applicable)
- Repairs and Maintenance
- Management Fees
- Body Corporate Fees
Commercial Property to house a business
Income
- Rent reviewed by CPI or Fixed Percentage
- Net rental + GST (if registered)
- Usually 3-5 year lease plus options and 1 month bond or more plus guarantors
- Electricity usage
- Utilities water usage
- Gas
- Certain repairs and Refurbishment / Fit out
- Gardening Lawns
- Cleaning and trade waste
- Rates
- Insurances and Glass
- Land Tax
- Body corporate fees / sinking fund and any special levies (if applicable)
- Management fees
If you would like more tips on how to invest in the best ways, please head to the products page and purchase Coral’s E-Book – Building Wealth in a Self Managed Super Fund.
June 18, 2010 8:51 pm|
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