When managing your Self Managed Super Fund (SMSF) it is important to create and implement an investment strategy, that should be reviewed on a regular basis to ensure you are staying within the set investment guidelines. We've outlined a few important considerations when investing in property via your SMSF:
1. Set your investment goals
As mentioned earlier, before you start investing and developing your investment portfolio, it is important to have an idea of how much you want to invest, what you want to invest in, and your attitude to risk. Another consideration is to make note of what you can invest in using your SMSF.
2. Start early, invest regularly and reinvest returns
The earlier you start investing, the more time your investments will have to grow and become profitable. The more regularly you add to your investments and to your investment portfolio, the quicker they can grow. Reinvesting your returns on your investments can also ensure your returns grow quicker. On the CrowdfundUP platform, we enable you, via your Digital Wallet, to reinvest your returns directly into another investment opportunity on the platform.
3. Diversify your investment portfolio
When it comes to investments, it is important to diversify throughout your investment portfolio. Diversity can help prevent loss during market downturns, as different investments will react differently to market changes. For example, diversifying your portfolio with property investments in different capital cities throughout Australia via the CrowdfundUP platform helps avoid downturns that may happen in one particular city, but not another.
4. Spend time in the market
The property investment market is constantly changing and it can be difficult to decide a particular time to start investing over another. The best approach: start building your investment portfolio as soon as you are financially able to! By building your portfolio sooner rather than later, and spending time in the property investment market, there is the potential to reap the benefits of long-term trends and protection against short-term ones!
5. Use dollar-cost averaging
Dollar coast averaging is designed to reduce risk, by making smaller investments over time so the risk is spread throughout market cycles. The CrowdfundUP platform allows you to invest any amount, as little as $5,000, across varying property investment opportunities via the platform, which then can be monitored in the Investor Dashboard.
"Any advice provided on this blog is general in nature. Readers are urged to seek their own professional advice before making decisions."