Hi guys, am new to even thinking about property Investment and have come across an opportunity and needing some insight as to how to continue.
I am a self employed builder/Handyman and have recently come across an opportunity to purchase a smallish commercial property for around $30,000. the property has been vacant for approximately 9 years(all other units in this building a currently owned/leased with two having been turned into modern studio apartments the other 4 storage facilities ). the property has all permits already approved for residential conversion as the owner was intending to do this but never got around to it having made his money on the 2 larger studio apartments.
I am seriously thinking about starting a smsf in order to purchase the property as I have no cash availability and being self employed finance can be a nightmare.I have up until this point paid no attention to my super and it holds only about 40,000.
I have a lot of comments as to smsf not being worth it for under 200,000. But if the property is only worth 30 and would require approximately 15 to 20 to convert, is it then worth it? and if so what’s the most cost effective way to set this up? am I even in the right place to ask these questions? all feedback appreciated.
You can borrow to purchase but cannot borrow to renovate (make sure that you have sufficient funds to complete the works without tying up all of your capital).
Will you being converting to residential (restrictions on what you can do in super) or will your business be renting it from the SMSF. Any rent paid will go to the fund (less any tax payable).
$40k is much less than what is required to be effective for a SMSF, you won’t get a land tax exemption either.
Hi @gaving
There are very strict rules regarding what you can and cannot do or buy, regarding real estate, in a super fund.
Best to speak with your accountant and solicitor to seek their advice and guidance prior moving forward/spending money.
Wendy Chamberlain | Chamberlain Property Advocates
https://www.wendychamberlain.com.au
Email Me | Phone MeMelbourne Buyers Agent & Sellers Advocate | Independent | Flat Fee
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