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3 Tips To Use Your Smsf Monies To Invest In Property
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If you are fairly new to financial terms, then I am sure that you would definitely want to know what is smsf? Well, SMSF is no rocket science but simply stands for self-managed superannuation fund, which has certain conditions. For instance, it has no more than five members and each member of a particular fund is a trustee as well. Moreover, none of the members of the fund should be the employee of another member of the fund until or unless they are related. This is perhaps the reason why nowadays, there are numerous family businesses, which are setting up a smsf.
These businesses and sometimes even individuals, actively manage their SMSF through various methods such as smsf borrowing apart from using it for other purposes. Today, we will take a look at some of the tips to make apt use of your smsf setup especially while investing in properties.
• Select a right kind of property for investment: Did you know that you can use SMSF loans to select and purchase different types of real estate properties, which include but are not limited to residential properties, commercial properties and even holiday units. However, before taking the final decision, what you must do is to consult your legal advisors, who will scrutinize the property documents and other aspects and then advice you whether you are taking the right decision or not.
• Use SMSF borrowing judiciously: Many people keep repeating one of the most common questions and that is “how much can I borrow using my SMSF?” This same question surfaces when it comes to purchasing an investment property as well. The answer to the same often varies and hence, you must make it a point to check the latest rates to see how much you can borrow for residential property and commercial property separately. Usually, you will find that rural property will consist of lower rates as compared to the urban properties. Now, there is no single rule regarding the optimal amount and this is where once again you have to take the help of your legal advisor.
• Don’t be in a hurry: Never ever be in a hurry while using your SMSF to invest in a property, especially when you want to purchase a property in your own name using your own SMSF. This is owing to the fact that there is a crucial step involving both you and the lender and hence, you must give it some time to carefully go through everything that involves the property transfer. Some of the steps involved in this process may take up to days and hence, you must be ready with that amount of time in hand while making a deal. You can take about roughly 6-8 weeks as the time that will be usually involved in this process.
However, even then you can never be fully sure how much time it will take to wrap everything up including the paperwork.
Source : http://goarticles.com/article/3-Tips-to-Use-Your-SMSF-Monies-to-Invest-in-Property/7872652/
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