Superannuation: The Process, The Rewards and The Risks
Purchasing your own real estate business offers you virtually limitless earning potential and freedom from the restrictions of working for someone else.
One of the main factors holding many would-be real estate business owners back is money; coming up with, for example, a 30-percent deposit on a business facility can be a crippling factor, making the dream of business ownership just that – a dream, and nothing else.
Fortunately, the dream may not be as far off as you’re lead to believe.
Recently, the Self-Managed Super Funds drew media attention as a means of buying property. How might we apply superannuation to building your own business? Scroll on, dear reader, and find out! The
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Your super will only be taxed 15 percent whereas your real estate business is taxed between 30 and more than 45 percent.
Additionally, a super fund can save you tax dollars when it comes time to retire. Capital gains on supers are capped at 10 percent for a property held more than one year. If you retire before selling the building, however, you’re not required to pay taxes on your capital gain!
The Control
One of the reasons you went into business for yourself in the first place was to gain more control of your professional life. When you rent from yourself, you are in control of the lease. Gone is the fear of landlords unexpectedly changing lease conditions in the middle of the term!
The Risks
As with any investment or business venture, buying your own real estate office building using superannuation is not without its risks. Consider the following before making the leap into business ownership through super funds.
The Growth Potential and Location
Let’s say your real estate business is going swimmingly and you’re growing more and more each year. You need to hire some new employees to build on your core staff, but – what’s this? It seems you’re a little tight on space, and the buildings surrounding you aren’t for sale! What is a business owner to do?
One way to prevent outgrowing your current location is to consider buying space adjacent to your property and including it in your business plan. If you outgrow
Amid the current financial recession when all industries appear to be toppling, property industry is still somewhat stable. Although there is an evident slowdown in the industry, yet it is growing. So the requirement for real estate professionals has not eroded and every property company needs a property professional. Today, when career opportunities in other professions show a great deal of
Think cautiously when getting involved in real estate investment. Don't look at a property for how much money it can make you. Instead look at it at how much of your money it will let you keep. You want the property value and rental income to maintain the overall investment of your portfolio that you put into
Mr. Alexander is new to the property management arena and has no experience with multi-family dwellings. Due to our clients limited capital he cannot afford to hire a property manager. Because Mr. Alexander will also be working his normal full-time job, and doing the property management as a ‘side-job’ the ability to manage multiple subcontractors will be highly inefficient and could lead to disgruntled tenants and higher vacancy rates.
Though it is carefully associated to real estate expending, the distinction is still evident. Real estate investing can be too overwhelming for a regular residence owner who needs to invest on something lucrative. Moreover,
Nowadays, investing in real estate is one of the lucrative commercial sectors that will provide large chances for an investor to generate cash with no trouble. Real estate is a commercial industry that, over time, has dealt with very small threats or failures. This is measured in such a way that investing in real estate is very much gainful and favorable when assessed to divide selling and buying cash or perhaps trading gold, silver, or even platinum.
A pension is the most popular way to turn your superannuation money into a regular income stream for your retirement.
Valley Realty is a real estate investment company based in Roanoke VA that was founded on June 1, 2015. The company operates out of a home-office in Roanoke, VA, and is owned and controlled by Sean Cox, who is a full-time resident of Virginia.
A strength to this business is the funded start up costs requiring less borrowing. Another strength is the knowledge of the owner (wrote and published a real estate book) and the potential to pay top commissions and training to the hired agents. This plan is high risk since depending on the market, the
Since real estate is an entrepreneurial career, real estate agents typically work for themselves, however this often also means no benefits, few vacations, and unstable income. The EXIT franchise has developed their own
Renting your home and becoming a landlord also has some handsome tax perks. Rental income is taxed as ordinary income and your taxes could be largely eliminated with the numerous deductions on expenses and depreciation. Please note the there is on major tax rule that may mitigate this benefit. If the house is eventually sold and you qualify for a capital-gains tax exemption discussed earlier, you 'll be taxed on the amount you depreciate, which would make renting out your home considerably less attractive than selling.
The concept of superannuation was introduced through the Superannuation Guarantee (SG) with the idea of managing, accumulating and growing assets of members so that once retirement arrives they can enjoy a higher standard of living without concern for a shortage of income when retirement occurs, they arrive in the form of pension, lump sums or both. It is further explained by Dawkins (1992) that our current retirement income system was weak and that there was a need to strengthen Australia’s national saving performance. He stated “Greater domestic saving will relax the current account constraint on Australia’s economic performance. It will mean that we can grow faster without relying so heavily on foreign saving and building up an
Additionally, the real estate academy teaches the entrepreneurs how and where to find money, that will fund deals such as rehabilitation costs. Lastly, its seminars offer skills, on how to make property attractive to potential buyers, so they can sell at a higher profit and fast.
Here's a clue, the property needs to generate passive income (that means it should be putting money into your pocket not taking money out). Capital gains (betting on an increase in value) should be a bonus not your sole reason for buying.
Real estate developers oversee the purchase existing or undeveloped residential, commercial or industrial real estate, make improvements to any buildings on it or construct new buildings, and sell or lease the improved land or buildings for profit.
Expand the business – e.g.: having funds to pay for new equipment, new office or a branch in a different city or country. (BBC News, 2014)