Investment - SMSF

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Is a holiday home a good choice for Self Managed Super Fund investment?

Choosing between a conventional investment property and a holiday home investment can be tough. You really need to decide whether you’re able to maximise occupancy, year-round.  

Here are some useful questions and tips to help weigh your options:
  • Will the property be rented to holiday makers most of the time and will the income generated exceed that of conventional long-term leasing?
  • Are you prepared to cover a large portion of the running costs out of your own funds?
  • What is your long or short-term financial goal for the property?
  • Will the property offer you sufficient tax benefits?
  • re you confident of your financial position if there is a downturn in the holiday rental or sales market?

Tips:
  • Try and take the emotions out of your decision making
  • Remember, property (other than your main residence) attracts capital gains tax when selling or transferring the title to someone else

If you are a first time investor who requires consistent rental income to cover mortgage repayments, it may be safer considering a long-term residential property in a capital city or a highly populated area, rather than a holiday home investment property for your SMSF.
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