Do you want to be financially independent?
According to a report by the Australian Bureau of Statistics (ABS), only 4% of Australians live to be financially independent by age 65. For every 100 people:
63 are on government welfare
29 are deceased
4 are still working
3 are financially independent
1 is wealthy
Most people are in the workforce for 45 years (aged 20-65). The decisions which we make during these years will determine what like looks like beyond age 65.
Do you want to join the 4% (financially independent)?
Remember, a debt free family home doesn’t produce income. How will you pay for utilities, food, transport, entertainment, and holidays. Superannuation will be nowhere near enough to replace the income required to live life on your terms. A “rule of thumb” formula for calculating the size which your investment portfolio (net of all liabilities) needs to be is to multiply the required income stream you want by 20. For example:
Required income (debt free) x 20 = Investment portfolio value (net of liabilities)
$80,000 pa x 20 = $1,600,000 **
** This figure excludes the value of your family home, and does not take in to account inflation.
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Self-Managed Super Funds (SMSF)
More than one million Australians are now members of a SMSF; it has fast become the largest component of Australia’s superannuation sector. Arguably the biggest attraction to setting up a SMSF is the desire to be active with retirement decisions and greater control. More and more SMSF’s are investing in direct property. If you are a trustee of an SMSF and looking to engage a professional to assist with residential property asset selection, PROPERTYOLOGY may be able to assist you.
The primary difference between having a SMSF and a more traditional (retail or industry) fund is control over the investment decision. Legislation changes in 2007 made it possible for SMSF’s to borrow money so that they could take advantage of the Power Of Leveraging and invest in more valuable assets such as property (refer illustration to the left).
So, it is possible to now combine some of your SMSF capital with a bank loan and buy an investment property. Once your SMSF has purchased the property, the costs associated with paying off the loan and holding the property is funded by rental income and your employer superannuation contributions.
The Australian Taxation Office describes an SMSF as “… a private superannuation fund you manage yourself, regulated by the Asutralian Taxation Office. SMSF’s can have up to four members. All members must be trustees (or directors if there is a corporate trustee) and are responsible for decisions made about the fund. If you have an SMSF, you are responsible for managing it and complying with all releant laws. SMSF’s are a legal tax structure with the sole purpose of providing for you retirement”. For more information from the ATO …
SMSF is a complicated topic with specific considerations needed in respect to general retirement planing, taxation, legal structures, loan and financial structures, investment strategy, compliance and insurances.
PROPERTYOLOGY is not a licensed superannuation advisor. Trustees of SMSF’s may see value in appointing PROPERTYOLOGY for assistance with asset selection. Other members of our team are qualified to assist clients with loans for SMSF’s.
In other words, it is possible to buy an investment property through superannuation without using any of the equity in your personal assets, without tying up your family home, and without any input whatsoever from your household budget. It’s not hard to understand why there has been so much growth in SMSF’s.
Regrettably, too many people with SMSF’s still adopt an amateurish investment selection process and end up placing their hard-earned superannuation in to poor performing assets. It’s still important for the SMSF to invest wisely and this is where PROPERTYOLOGY can help you.
There are limitations, restrictions, and risks associated with buying property within a SMSF. A simple comparison:
For me it's a no brainer.
The properties pay for themselves and their value is steadily increasing. It's not a hard decision; that's why I'm going to buy more. I have properties in multiple states. They range from close to the city, in the suburbs, and in large multi‐industry regions. Investing in property is not nearly as scary as investing in shares, or scarier still, doing nothing. A house is always going to have value. You are never going to wake up one morning and have your house be worthless over night.
Glen Hunt (Sydney‐based accountant).
There is no substitute for the service that Propertyology provides
"There is no substitute for the service that Propertyology provides because we would never have the time or expertise to confidently buy a property in a location with the highest potential for growth if it wasn't in our own locality. This severely limits your growth potential if you live in Sydney. Their depth of research has given us the confidence to buy properties without feeling the need to see them beforehand. Providing more than just facts and figures, the interviews with community stakeholders make the prospect of investing in those locations exciting as we hear the enthusiasm and optimism coming from the local residents."
Lily & Alvin, Sydney
They've definitely saved me money
Propertyology are professional in their dealings and they help source local professionals to carry out pest and building, property management etc... Simon doesn't follow the herd, so they [Propertyology] are not going to put you in to somewhere risky like Sydney at the end of its boom. They have got me in to good areas that I wouldn't have thought of, and they have definitely saved me money with their research and price negotiation skills.
Glen Hunt (Sydney‐based accountant).
Very impressed with PROPERTYOLOGY’s market knowledge
“We have been very impressed with PROPERTYOLOGY’s market knowledge as they have identified areas with terrific growth drivers before anybody else even notices them, and certainly before the markets in those areas heat up. They really focus on uncovering opportunities that others don’t yet see”.
Glen & Sue, Cranebrook, NSW
There is just no substitute for his research and analysis
"Working with Simon from abroad (France) made investing simple, easy and most importantly stress free. Buying property can be a daunting experience at the best of times and it is only after working with Simon that I realised how little homework I did to ensure I had a sound investment even when I was based in Australia… There is just no substitute for the research and analysis he brings to the table."
James Matthews, France
We were extremely happy with the outcomes Simon negotiated
Having bought and sold a few family homes over the years we thought we were relatively astute investors... We could see the significant research which Simon puts in to selecting properties in a mixed bag of locations to ensure a balanced and varied portfolio... We were extremely happy with the outcomes Simon negotiated on the properties we did buy. All of our properties are performing very well."
Bryan & Melinda P, Brisbane
PROPERTYOLOGY are professional & ahead of the game
"The PROPERTYOLOGY backroom staff is always on top of looming settlement deadlines, and provide timely prompts to action. This is ideal as life & work often have a habit of getting in the way, so we never need to worry about forgetting a deadline... We have and will continue to use PROPERTYOLOGY because they are professional in their dealings and ahead of the game".
Glen and Sue, Cranebook, NSW
It has been an absolute delight in working with Propertyology!
By nature I like to be in control, so determining that the right path was for us to buy a decision-maker to enable this process was quite difficult... The coordination of all the activities involved and the network of services and people that you put us in touch with (ie, the conveyancer, property agent etc) was seamless from the beginning to the end.This is the part of your service that I value the most... I have no hesitation in recommending your service."
Teri & Matt, Sydney