Self-managed super funds – SMSF – have become a popular way for Australians to build their retirement savings.
In fact they’re now the fastest growing segment of the superannuation market, with over one million of us now counted as members of an SMSF.
Those members collectively hold more than 1/2 billion dollars in superannuation assets, approximately 16% of which is invested in direct commercial and residential property.
Property, along with Australian shares (32%) and cash and term deposits (28%), make up the bulk of Australian SMSF assets.
Your SMSF can have two kinds of propertyinvestments. These are commercial property, like a factory, a warehouse or even your business premises, and residential property such as investment units and houses.
As with all things superannuation, there are rules around investing in property in your SMSF – For example, the property must meet the ‘sole purpose test’. SMSFs are also prohibited from investing in the family home or holiday home for the personal use of a member.
SMSFs can also borrow or gear their super into property, but it must be done under very strict conditions called a ‘limited recourse borrowing arrangement’ – or most commonly known as a SMSF loan.
Of course, you should assess whether the investment is consistent with the investment strategy and risk profile of your SMSF before committing to a geared property investment; and don’t forget to consult with your Accountant or Financial Advisor
If you are ready to buy, we are ready to help. We are equipped with the knowledge and expertise to help you get the most out of your SMSF Loan. We can show you how to best set up and obtain your SMSF loan to reflect your financial needs and get the most out fo your super borrowings.