More and more Australians are realising the benefits of structuring their own Self-Managed Super Fund (SMSF) – a trust that is set up to provide a retirement income for its beneficiaries. SMSFs have increased in popularity since the GFC, due primarily to the control, transparency and flexibility offered to its members.
If you’re not one of the 1 million plus Australians who have taken control of their superannuation savings and set up their own SMSF, let us hazard a guess as to what your reasons might be:
“It’s too hard and I don’t know anything about Superannuation.”
“I’m happy with the way things are – why change what isn’t broken?”
“I don’t have the time to put into managing it. I’d rather leave it to someone else.”
“It’s too risky.”
“It’s only for rich people.”
And so the list goes on.
Of course there is no one-size-fits-all solution and SMSFs will not suit everyone. However, here are just a few of the benefits of having your own SMSF:
- You have complete control over the fund’s investments
- You will have access to a broader range of investments
- You can use your SMSF to invest in property, both in Australia and offshore
- You can hold items such artwork, jewellery, antiques, vintage cars, coins and even wine
- As your fund grows in value, management costs remain the same
- You will have access to certain tax concessions, eg deferral of lump sum tax
We’d like to focus on just one of those benefits – offshore property investment.
For those of you who already have a SMSF, the new financial year is the perfect time to reassess your current investment portfolio. In today’s economic climate, it’s becoming increasingly difficult to make solid returns without taking high risks. With an unstable stock market, Bonds and a cash rate under 3%, as well as inflated property prices, Australian investors have to be more savvy and look for opportunities in other markets.
If we take the US market for example, consumers are looking healthy. For the first time in US history, the consumer is repairing their personal balance sheet – saving money (positive for the consumer) yet at the time, spending more (positive for the economy). The current employment rate is healthy at 4.7% and the property markets in most major cities have recovered from the GFC. Overall the US economy is healthy.
If you have not yet invested in the US property market, some might say you’ve missed the boat and in some cases, we would agree. However, there are still very good returns to be made in certain US states. Take Phoenix Arizona for example. In Glendale, property prices are still undervalued and generating strong rental demand. This presents huge opportunities for Australian investors to earn between 8 -10% Net returns per year with further capital growth potential.
The graph below illustrates the capital growth potential for an average 2-bedroom property in Phoenix, Arizona.
Investing in offshore property can be a daunting prospect, and as such it’s important to do your due diligence and work with a company who specialises in the field, and can manage the process on your behalf.
At International Property Services we have developed a highly successful, water tight investment model for offshore buyers, and have a current portfolio of over 1200 properties and 1000 investors. We guarantee your rent for minimum of 5 years and you will never receive a single invoice for repairs to your property. You can’t get those guarantees in Australia! Our SMSF investment strategy guarantees our investors 8-10% pa Net returns for a minimum of 5 years (excluding capital gains).
We understand that both SMSFs and offshore investing will not be for everyone. However, it is always worthwhile to arm yourself with as much information as possible so that you are able to make an informed decision. If you take the time to research your options, you might be pleasantly surprised at the opportunities available to you as you discover just how easy it is to be in total control of your money, your investments, your retirement and ultimately your future wealth.
Click here for more information about setting up and managing a SMSF or contact us on +61 411 315 318.