Buying property through super

Property is a favourite investment of many Australians and it is possible to add bricks and mortar to your super but some strict rules apply, and it’s an area where it pays to speak with your Mortgage Choice Financial Adviser.

Is property right for you?

An important first step is to consider whether property is the right investment for your super. This involves asking some key questions.

Are you happy to take control of your super?

To put property in your super, you will need to establish a self-managed super fund (SMSF). While is something a specialist SMSF Mortgage Choice Financial Adviser can arrange on your behalf, running your own fund does come with a range of costs and responsibilities. We can do the sums for you to help you decide if a SMSF is the right choice for you.

Can your SMSF handle an investment loan?

Property can deliver healthy returns – both ongoing rent and long term capital growth. However, your SMSF may need to borrow money to invest in a property. Where this is the case, it’s critical that your fund can manage the loan repayments in terms of cashflow.

A special type of loan is available for SMSFs investing in property. Known as non-recourse funding, this type of finance is not available through all lenders. Working with your Mortgage Choice broker, we can help you identify the loan that is suitable for your SMSF, with your Mortgage Choice broker then organising the loan application on your behalf.

Will your fund achieve diversification?

Ideally, your super should be invested across more than one asset. If a property is the only investment held in your SMSF you may not be achieving a strong level of diversification.

We can suggest strategies to diversify your fund’s portfolio over time so that your super enjoys the benefits of diversification while still reaping the rewards that an investment property can provide.

Talk to your local financial adviser today

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