Want to cover your future by investing in a property today? A Self-Managed Super Fund (SMSF) is one way for Australians to access the funds they need for a property investment. However, the decision to go for an SMSF property purchase requires careful planning, research and advice – owing especially to the unpredictable property market. At Beyond I Wealth we’re experienced and expertly skilled in the practice of buying property with SMSFs. Here are 5 things to consider before you take the plunge.
- Let’s Talk About Trust(ees)
One of the best parts of using your SMSF to buy property is that you can combine capital with up to 6 partners, giving you access to more funds. It’s important to discuss and explicitly lay out the terms of the joint investment in a way that each stakeholder is on the same page. Make absolutely sure that your trustees are in it for the long haul too, as this is a long-term project.
- Existing Property Or A New Build?
It’s important to do some research on the type of building you go for, because there are some pros and cons on both ends:
- With a new build, it’s likely that the prices will need to cover your agent’s commission payout, so you need to be careful of this. However, the advantage here is that maintenance and repair issues are reduced significantly in comparison to older buildings.
- Where existing buildings are concerned, longstanding maintenance and construction issues may cost you more in the long-run if not identified and fixed early on. The pro, however, is that it’s likely that there are detailed records and a working system for running the property effectively.
- Limitations On SMSF Property Investments
Buying property with superannuation means there are some restrictions you’ll be expected to adhere to. An SMSF property investment is geared towards your future, so it’s treated as such. Some restrictions include the fact that neither you nor any family members or relatives are allowed to live on the property and the fact that your SMSF can only purchase from a property from you or a relative if it’s commercial in nature.
If you’re thinking of making an SMSF property investment, Beyond I Wealth is right up your alley. Contact us on 1300 633 616 for A-grade financial advice today.