Self-managed superannuation funds (SMSFs) are a great way to invest in a variety of asset classes, including ASX shares. Residential property is one potential investment, though that area may be less attractive if SMSFs can't borrow to buy.
Labor and the Greens have reportedly struck a deal to pass the capital gains tax (CGT) and negative gearing changes announced in the Federal budget, while including a new measure to end SMSF borrowing to buy properties.
With that change in mind, I think there are still plenty of compelling investment opportunities, particularly on the ASX share market.
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Commercial properties AKA real estate investment trusts (REITs)
SMSF investors could decide to invest in commercial properties instead, which may provide a higher yield than residential properties.
I like investing in real estate investment trusts (REITs) because they're easy to transact on the ASX. We can buy into a portfolio of properties in a single investment, and the properties are managed for us by property fund managers.
There are various REITs to choose from, including ones based on industrial properties, farmland and so on.
Three of my favourites in the sector include Rural Funds Group (ASX: RFF), which owns farmland, Centuria Industrial REIT (ASX: CIP), which owns industrial property, and Charter Hall Long WALE REIT (ASX: CLW), which owns a diversified portfolio of properties with long leases.
There are other REIT sectors, like shopping centres and office buildings, though they face headwinds, so I'd be very selective about those two areas and only buy REITs at an attractive discount to their net asset value (NAV).
ASX dividend shares with fully franked dividends
An even more attractive area to invest could be companies that pay attractive, fully franked dividends. Franking credits are refundable tax offsets, which are great for Australian SMSF investors.
ASX blue-chip shares could be some of the most reliable businesses to own. I'm thinking of names like Telstra Group Ltd (ASX: TLS), Bunnings and Kmart owner Wesfarmers Ltd (ASX: WES) and Coles Group Ltd (ASX: COL). They each have a solid dividend yield and a track record of increasing their dividends annually over the last few years.
There are a few other S&P/ASX 200 Index (ASX: XJO) shares that have a strong track record of reliability, including Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) and APA Group (ASX: APA). Lovisa Holdings Ltd (ASX: LOV) and JB Hi-Fi Ltd (ASX: JBH) also have an impressive track record of growing dividends over the long-term.
Finally, I'm a big fan of listed investment companies (LICs), which allow investors to diversify and gain exposure to quality assets while also receiving attractive dividend yields and growing payouts.
Some of my favourite LICs for passive income are MFF Capital Investments Ltd (ASX: MFF), WCM Global Growth Ltd (ASX: WQG), L1 Long Short Fund Ltd (ASX: LSF), Future Generation Global Ltd (ASX: FGG), Future Generation Australia Ltd (ASX: FGX), Hearts and Minds Investments Ltd (ASX: HM1) and WAM Microcap Ltd (ASX: WMI).
