Did you know you can use your super savings as a way to enter the property market? For years, lenders have allowed you to use your SMSF fund to buy a residential property, but there are strict guidelines around it.
Before we dive in, by SMSF, we mean Self-Managed Super Fund which is essentially a private super fund that you manage yourself.
How does it work?
The first step is to have a discussion with an expert (typically your broker) to determine whether investing through an SMSF is the best way to achieve your property investment goals, given your individual circumstances.
If the answer is yes, the next step is to set up your SMSF.
Setting up a SMSF can be tricky, so the best thing to do is to use the services of a specialist. You should have your SMSF set up before you start looking at potential investments to buy. Hot tip! Please be aware that rolling over any existing super into a SMSF may take up to a month to process, so account for this time in your planning.
What can you buy?
There are two main, and fairly simple, rules of buying residential investment property through SMSFs. Firstly, you and your relatives cannot live in the property and, secondly, you can maintain the property but cannot improve it. The residential investment property can be a house, an apartment or townhouse, or any other type of property a non-SMSF investor might consider. Think: somewhere, someone would like to live in.
The maximum borrowing within an SMSF is normally 80 per cent of the property value (but here at Pointer Finance, we will explore all available options!). It’s important to take into consideration that there is a cost to establishing and maintaining your SMSF, as well as subsequent fees and charges involved in the purchase of the investment property.
To learn more about SMSF loans and see if it is a good option to achieve your property dreams, then get in touch with us for a no-obligation chat. We’d love to talk you through your available options! Contact us