SMSF Property Choices

There are different types of property exposures that an SMSF may add into its portfolio mix. Here is a comparison of three (3) types of property assets

My SMSF Property

 
Ownership beneficial Legal ( Torrens Title) legal Title
Loan nil nil 70%
Cost $50 - + $20,000 - $100,000 $350,000 - $900,000
Setup cost $10* plus 0.5% buy / Sell cost $0 1% of value
Liquidity liquid semi-Liquid illiquid
Stamp Duty Covered by BrickX $1,285 3% -5%
Provider /Developer Risk low low low
Time Cost 1 hour p.a 1 hour p.a 5 hours p.a
Management cost time 6% + $0.09 per Brick 30 min p.a 3.89% 30 min p.a 5% p.a

BrickX

Is clearly cheap to purchase, the ownership is a beneficial ownership structure where the provider owns the property. Its very affordable however and a great way to gain some property exposure without the work and leverage risks. Ongoing costs are slightly higher.

Learn more

How it Works

A Brick represents a fraction of a property

Direct Property

Very illiquid, high leverage, higher setup and ongoing costs as well as time costs. Although the volatility is low, direct property has; historically; been one of the best performing asset classes in Australia over the last thirty years and its simple to understand with rental returns keeping up with inflation costs making it an attractive low risk investment.

Summary

So, which is superior ? well it’s a case of assessing your risk appetite, suitability of location and affordability. Clearly the Bricklet investment is one of the most innovative and transparent products to hit the market with clear title and blockchain management of audit trails. Direct property is an age old favourite in SMSF portfolio’s and BrickX is affordable with the ability to diversify into many geographic locations by buying multiple bricks around Australia. It is however, best that advice is sort where in doubt with all types of SMSF investments. Read the PDS and seek legal advice before proceeding.