The Process, The Rewards And The Risks - 5686 Words

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†¦show more content†¦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