All Topics / Help Needed! / SMSF IP Capital Growth or Cash flow Strategy

Viewing 5 posts - 1 through 5 (of 5 total)
  • Profile photo of Asbestos Audits QueenslandAsbestos Audits Queensland
    Participant
    @aaq
    Join Date: 2005
    Post Count: 47

    Hi Guys;
    we are planning to buy our first IP in our SMSF so is it better to look at a property for capital growth or cashflow in this situation?

    All thoughts-opinions?

    Brian & Cindy

    Asbestos Audits Queensland | Asbestos Audits Queensland
    https://asbestosaudits.com.au/
    Email Me | Phone Me

    Any asbestos questions ask me.

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213

    Do you want to make lots of money or just a little bit?

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of Asbestos Audits QueenslandAsbestos Audits Queensland
    Participant
    @aaq
    Join Date: 2005
    Post Count: 47

    HiTerry – what am I missing I was told the IP had to be self supporting which would indicate cashflow over capital growth? 

    Brian & Cindy

    Asbestos Audits Queensland | Asbestos Audits Queensland
    https://asbestosaudits.com.au/
    Email Me | Phone Me

    Any asbestos questions ask me.

    Profile photo of WJ HookerWJ Hooker
    Participant
    @wj-hooker
    Join Date: 2007
    Post Count: 272

    I think the good old days of capital growth have gone years ago

    Maybe if you are lucky some small capital growth, but probably capital loss is the expected thing over the last 5 years and into the future.

    Good luck

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213

    I think there is no point in investing if there is no capital growth. No point in getting $50pw cash flow for 30 years if it only grows at 1% pa. I would much rather losing $50 pw (initially) and getting 7% pa growth. Whether this is possible or not is another matter.

    I think you can buy a negative cashflow property with a SMSF, but you will need to cover the costs with continuing contributions.

    And, I would much rather just use shares for the SMSF. They are much cheaper to maintain and get into and out of. Property costs are high enough and when going in a SMSF there are even more costs – higher fees, higher interest too, plus you cannot access future equity for future borrowings (I think).

    Also it is good to diversify a bit.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

Viewing 5 posts - 1 through 5 (of 5 total)

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