My SMSF has largly cashed out of the market and I wish to follow the traditional route of investing into property.
The time horizon is 10 years + and the proposal is for each child to buy a house in a run down area and close to a train station which are adjacent to each other and amalgamate the titles into a developer block of 3500 sq m. This avoids land tax. When all blocks are purchased we sell out.
A proposed [cash] house purchase would show a 3.5% return.
The SMSF would still be balanced across asset classes.
My SMSF would comply with all your stated rules namely "permitted under the SIS Act in relation to investment restrictions ie. sole purpose test, acquisition from related parties, in-house asset rule, arms length rule, borrowing restrictions, restrictions on loans to members and investment strategy must be in place."
The only conundrum is can I rent the property to related family members that are not in the SMSF ?
What catches are there with the sole purpose test regards renting to family memebers ? Would I be in compliance if I simply did not rent to family members ?
Obviously I will do more research.
It is not imperitive that the proposed property be bought because it has optimum presentation for its location.
The property market in Sydney is unlikely to show growth for the next 5 years.
