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Self Managed Superannuation Fund Q & A

The following advice is of a general nature only and intended as a broad guide. The advice should not be regarded as legal, financial or real estate advice. You should make your own inquiries and obtain independent professional advice tailored to your specific circumstances before making any legal, financial or real estate decisions. Click here for full Terms of Use.

What is a complying Fund?

A ‘Complying Fund’ is a fund that meets all the applicable requirements and Laws. There are heavy penalties for non-compliance. Non-compliant funds incur an income tax rate of 45%.

Do I have to pay capital gains tax when selling a SMSF investment property?

One of the major advantages of SMSF investment property is that real estate investments receive concessional tax treatment. This means that when you sell real estate owned by your SMSF, as long as it is intended for the sole purpose of retirement benefits, no capital gains tax is applicable.

How can I renovate to get the greatest return?

Renovating a property can pay dividends, but you owe it to yourself and your wallet to make sure whatever projects you undertake offer a high return on investment, says First National Real Estate.

A new coat of paint, built-in wardrobes and replacing carpet with hardwood floors may make a home more attractive to renters and buyers, but not all renovations are created equal.

Focus on kitchens and bathrooms

An open plan living room may set prospective buyers to salivating, but kitchens and bathrooms tend to be of greater importance. This means it can pay off big to update your kitchen and bathrooms with new fixtures and appliances.

Of course, completely redoing a kitchen or bathroom can be an expensive endeavour, so don’t gut a space if a simple facelift will do. Upgrading appliances, installing new lighting fixtures and refinishing surfaces can go a long way.

Avoid high-price items

A swimming pool may be a luxurious and sought-after amenity, but it very rarely equals a significant return on investment.
Firstly, installing a swimming pool will cost you plenty. Secondly, many home buyers are simply unwilling to pay the extra costs that come with maintaining a swimming pool. For every buyer a pool might attract, many more may be turned off by it.
Also keep in mind the safety issues and higher insurance premiums that often come with swimming pools.

Appeal to a wide variety

Renovations can be a great way to express your personal tastes and passions, but remember that renovations that maximise return should appeal to the largest number of potential renters and buyers possible.

This means avoiding design choices that may turn off most people even if they please you. Changes and styles that last and appeal to a wide variety of people are a much better investment than singular renovations that might age poorly.

How can I hold onto to quality tenants?

Renting out a home can be a great way to increase your income while investing in a valuable asset.

However, just as important as finding the right tenants for your property is holding on to them. Having disruptions in tenancy can not only cost you money, it can be a stressful and time-consuming problem.

Quality tenants will provide you with regular income, as well as help to keep your investment in good condition.
With this in mind, there are many strategies you can use to make sure your tenants remain yours.

Privacy

At the end of the day, your rental home belongs to you. However, renters do not want to feel like they’re living at the whims of their landlord, especially when it comes to privacy. By making sure you do all you can to give your tenants privacy, you will help them to feel like they’re living in a proper home, not just a temporary abode.

The best way to do this is to give proper notice before dropping by the property, as well as not overdoing it with your visits.

Attention

Just as important as knowing when to leave your tenants alone is knowing when to put them at the forefront of your mind.
Things like needed repairs should be taken care of as soon as possible. Simply telling your tenants that you’ll take care of a problem isn’t the same as following through on it, so when it comes to inevitable issues like fixing or replacing things in the home, do your best to be attentive and responsive.

Appreciation

In many ways, a good tenant is like a good employee. After all, your income depends on them, and if they’ve shown themselves trustworthy and respectful toward your property, it can pay off to show your appreciation much in the same way an employer would.

Obviously offering raises and vacation time isn’t in your power, but small gestures like notes of appreciation and gifts during the holiday season can not only show your gratitude, they can help to create a bond of loyalty between you and your tenant that will keep them around longer.

What are the most cost effective renovations?

Performing a few renovations here and there can even help you to add some value to your home or investment property - an important step if you're thinking of selling soon!

Here are three budget renovations you might want to think about:

Refresh and repaint

Have you ever walked through your home and spotted countless chips, scratches and marks on your walls and ceilings? Perhaps your wallpaper has begun to peel or mould has gotten the better of your bathroom paint?

A few licks of paint throughout your home can do wonders. It's also an inexpensive and creative way to make your home look new again. Repaint cupboards, walls, ceilings and drawers to freshen up the interior of your home.

Tidy up the backyard

Green thumb or not, it's easy to get right into your backyard and give it a makeover. All you will need are some gardening tools, a few helping hands and a skip to tidy up your backyard and get it looking neat and tidy.

Topsoil, bark and plants are cheap additions to your backyard and can turn your garden from an overgrown patch into a manicured entertainer's paradise.

While you're at it, why not re-stain and refurbish some of your neglected outdoor furniture?

Replace fixtures and fittings

Have a look at the most-used items in your home and determine whether they're in need of replacement. Items such as taps, door handles, wall switches and light fittings can all easily become worn down over time due to overuse.

However, they're also not that expensive to replace. You might want to update some of these to ensure they tie in with the new decor in your home and are more functional.

Remember, DIY renovations require you to stick to a strict budget. Always keep this in mind when you're purchasing tools or hiring extra help.

Which adds more value to real estate? Potted gardens or garden beds?

If you're searching for an easy and relatively inexpensive way of adding value and appeal to your home, then look no further than your own backyard.

By putting a few hours and some hard work into your outdoor space, you can enhance the aesthetic appeal of your home or create a functioning vegetable garden. This can go a long way towards improving appeal, especially when you've placed your home on the market.

However, one of the questions many people ponder is whether to have a potted or garden bed. Each option has its own pros and cons, but it's ultimately dependent on the size of your backyard and how much time you're willing to put into caring for it.

Potted gardens

One of the biggest perks of installing a potted garden is that they are easily removable.

This means they can be moved around into sun or shade, and are also a great option for renters who wish to take their plants with them when they move.

Potted gardens are the best choice for those with limited land size, such as people living in apartments, townhouses or units.

However, this type of garden needs a lot of regular watering, as the pots can dry out quite quickly.

Garden beds

If you have the space for it, a garden bed can be a great addition to your home. You can get creative with shapes and sizes, or even consider installing a vegetable garden to take advantage of the rich soil.

Digging up your own garden can be slightly cheaper than a potted one, as you won't have to buy potting mix, tubs or planter boxes. They're also better at retaining water, as they're directly in the ground.

You can also use compost in your garden beds, which gives your plants added nutrients while they're growing.

Garden beds require a lot of maintenance, as you'll regularly need to weed them or top up the mulch. Otherwise, you might face unsightly overgrown weeds popping up here, there and everywhere!

Remember that both options - potted or not - need some sort of regular maintenance. Be sure you can put the time and effort in to keep your garden looking great.

How can I increase the rent from my rental investment property?

Many people choose to invest in property because it is a great tactic to build wealth and secure their futures financially. However, as it's an investment, owners should look for ways to maximise the returns on their properties. First National property managers always do.

If you're looking for strategies to get the most out of your rental property, here are three tips to help you on your way.

Hire a professional

Have you ever had to bang on a tenant's door to pick up missed rent? Has your phone gone off at midnight after a tenant's hot water cylinder has burst for the third time this year?

Managing your own rental property can be a difficult task, especially if you have a vast portfolio. Instead of trying to juggle multiple properties at once, enlist the help of a professional property manager to take a few off your hands.

Property managers have the knowledge, time and skill to ensure your investments and tenants are taken care of.

Review your rent

It may have been years since you last reviewed the price you're charging for your rental property.

The important thing to remember is that the market can change quite often. Fluctuations in vacancy rates and median rents can all impact how much you can charge for your property, and you may end up charging too little.

Review your rent on a regular basis to meet the market. Compare your home with other rentals similar to your property, or obtain a rent appraisal from an agent.

Regularly refresh your rental property

The key to ensuring your rental property remains tenanted is to keep it in good condition. By staying on top of maintenance issues and refreshing the interior, your investment can be kept looking great for longer.

At the end of each tenancy, you might want to give the home a quick lick of paint, have the carpets cleaned and the garden reworked. You might even be able to charge a bit extra for rent, while also making your home look more appealing to tenants.

What are the most important things to look out for at open home inspections?

Open house inspections can be equal parts fun, exciting and nerve-wracking, especially if you find yourself falling in love with a property at first sight.

However, there will be plenty of time to dote on your home in the future - inspections are all about keeping your eyes open for any signs that your potential new abode might be a major lemon.

Homes may not have voices, but that won't stop them from trying to tell you something. Here are some of the more serious open inspection red flags to be on the lookout for.

A shaky foundation

It's often said that a strong foundation is the most important part of whatever's built atop it, and this can hold true for houses. While costs can vary, cracked foundations are notoriously difficult to fix and can cost homeowners tens of thousands of dollars.

Keep an eye out for cracks on steps and walkways outside. Small cracks may be normal and come with age, but wide, horizontal cracks may be a dead giveaway that the home is falling apart underneath.

Wet worries

Nothing quite compares to the risks associated with water damage. Not only can moisture rot building materials, it can lead to the growth of mould and mildew. In turn, this can lead to serious respiratory problems for people with allergies.

Signs of potential water damage include dank, musty smells, water stains, mould spots and warped walls. While water damage itself can be fixed, even more important is what caused it. After all, a leaky pipe will be much easier to fix than a hole in your roof.

Pesky pests

Not only can vermin and insects make your skin crawl, they can also be terribly difficult to get rid of. The damage caused by pests like mice and wood borers can be far-reaching, and the costs associated with eliminating them aren't cheap.

During an inspection, take time to look around for signs of pest problems. These include dead bugs, animal droppings and mouse holes.

How can I be a great landlord when self managing my property?

As the owner of a rental property, your source of income stems from the rent your tenants pay you. Therefore, it's crucial you ensure they're happy so their tenancy period runs smoothly.

Regardless if you've gone down the road of DIY property management or hired a professional, there are many ways to become a great landlord.

Listen to your tenants

If there is a problem with your home, such as a broken appliance or noisy neighbours, it's likely your tenants will let you know about it. However, the key is to actually do something about it and not let their alarms go unheard.

Keep them informed of any progress you've made, such as booking a handyman or speaking to the pesky people next door. This will let them know you've listened to them and are taking steps to resolve any issues.

Improve the home

It's no use holding onto a rental property if you're not going to maintain it. To keep your tenants happy, and your property in good condition, stay on top of maintenance issues and freshen up the home every so often. Perhaps after the end of every tenant cycle, you might want to inspect the property and see if anything needs upgrading or repairing. Make sure any maintenance you undertake is done by a licensed, insured, professional.

Carpets are one area that see a lot of wear and tear over time and are an easily replaceable item.

Educate your tenants

When your tenants first move into your rental property, educate them about the home and their responsibilities. For example, when rubbish day is or if they need to maintain the lawns and gardens.

Most tenant responsibilities should be outlined in the tenancy agreement, but be sure your tenants have read and understand this in full.

Being an owner of a rental property comes with a lot of responsibility. If you're unsure whether you have the time or experience to dedicate to your investment and your tenants, consider getting a professional property manager to assist you.
Don’t forget, First National Real Estate has a national team of qualified, experienced property managers. We’d love to take all the hard work off your hands and manage your property for you. Give us a call on 13 16 66 for more information.

How can you grow vegetables with a small garden?

There’s no better way to eat healthy, save money and make the most of your property than to plant a garden.

Some home owners may feel overwhelmed by the idea – after all, not everyone is born with a green thumb. However, creating a varied and delicious garden full of herbs and vegetables can be easier than you think.

Herbs

Planting herbs is a great first step for burgeoning gardeners. Best of all, because they require such little space, even property owners with little room can have a stunning herb garden. In fact, herbs can even be grown easily indoors!

For instance, all you need to do in order to always have fresh basil on hand without visiting the supermarket is place a basil plant in a window that gets at least a few hours of direct sunlight each day.

The same can be done with delicious herbs like rosemary, sage, mint and chives.

Veggies

Vegetables like carrots, radishes, onions, tomatoes and lettuce are also very easy to grow for amateur gardeners.

Additionally, just like with herbs, there are plenty of ways to grow fresh veggies if space is an issue.

For example, while garlic cloves are a popular cooking ingredient, they are often too bitter to the taste to cook with when they sprout. But instead of tossing these in the garbage, you can simply place sprouted cloves in a glass of water and grow new sprouts.

These sprouts are not as overpowering as garlic cloves, and can go great in a number of dishes or as a garnish.

Lettuce stems from a head of romaine lettuce can also be used to grow fresh produce. All you need to do is place the intact stem in a bowl with approximately a half inch of water and place it on a windowsill that gets some sun.

Soon enough, new leaves will grow and you’ll be on your way to crafting a delicious salad.
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