As I meet clients in and around Newcastle, a common question asked by clients is ‘is having property in Super worthwhile and what does it involved’.

To help answer these questions here is an extract from Bina Brown of AFR.

Property investors looking for ways to turbo charge their retirement savings are focusing on do-it-yourself superannuation funds. Borrowing money to buy property has long been a favourite strategy among investors. Factors that make it preferable include tax benefits through negative gearing and the fact you can usually see and touch what you own.

Rules introduced in September 2007 to legitimise listed security warrants mean borrowing is now permitted by a super fund if the borrowing is structured as an instalment warrant.

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Pulling out the crystal ball is always fraught with danger… So I have closed my eyes and here we go: 

ARIES
Australian Shares
The Australian share market still provides a good medium term investment opportunity. Over the past year, companies have taken the opportunity to cut costs and wind back debt levels, which should support profit growth as the economy recovers.

TAURUS
Emerging Markets
Likely to be the key driver of any global economic recovery. It is anticipated that countries like China, India and Indonesia will record strong economic growth in 2010 and beyond.

GEMINI
Developed Markets
Developed economies like the US, Japan and Europe are likely to record positive growth in 2010 after contracting over the past 18 months. To date these countries’ share markets have underperformed developing or emerging markets, and with a return to growth, the company profit outlook should improve and attract investor inflows.

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This is a debate which has been raging for many years. My question is, why can’t it be an ‘AND’ conversation?

They have different characteristics such as level of income paid (some shares don’t pay any income), tenants, franked dividends, depreciation, increased ability to borrow with property etc etc.

One key thing to be aware of is that they tend to ‘boom’ at different times in the economic cycle http://genxadvisers.com.au/economic-time-clock/

So why not have both in your investment or retirement portfolio?

There is also many types of shares and property: residential, commercial, industrial, resources, industrials, small caps etc.

Today I wanted to focus on some recent results being released on residential property.

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