Why are SMSFs such a popular way to invest in property? Many people already understand or have experienced for themselves that property investment can be a great way to build wealth. It’s also widely recognised that having the ability to borrow money for investment is a terrific strategy for accumulating wealth. Property investment itself – inside or outside of an SMSF is generally perceived as being less volatile than investment in shares. Estate planning allows investors to potentially enable children to enter the property market in a climate where many people are seeing their children ‘locked out’ of the property market. For more information visit https://smsfloanexperts.com.au
SMSF Property Investment Video
So why do people invest in property through their Self Managed Super Fund? Why is it so popular? Why are we so busy at the moment writing loans for people who want to buy property with their SMSF?
There are a number of reasons that really stand out when we talk to clients as to why they’re going down that path. One is that it’s an asset class that most people understand. They’ve probably purchased a property in the past to live in and they’ve seen it grow in value over time and think ‘wow that’s going pretty well, I understand that’.
Benefits of purchasing property through SMSF
A lot of people have purchased investment property in their name and understand the benefits of borrowing money and purchasing an asset that’s worth a lot more. Borrowing is another reason. You can take $100K or $150k worth of Super and acquire an asset that’s worth $400k or $450k – so leveraging is a big reason. People often see property as being less volatile than shares – rightly or not, that very much is the view out there. So it’s a more slow and steady – or often not so slow, but steady investment.
Another reason that people are looking at property is that they’re thinking of estate planning. They want to think about the kids and see them as being locked out of the property market. They see that if they invest their Super into commercial property and the Super pays the property off and they can live off the rent in retirement, then when they pass away the property is still there ready for the kids. These are pretty common reasons why we find our clients want to invest their Superannuation in property.
* The information contained in this blog is general information only. No part of this blog is to be construed as a solicitation to buy or sell any security or financial product. The author, in preparing this blog, did not take into account the investment objectives, financial situation and particular needs of any particular person. Before acting on any information or advice in this document, you should consider the appropriateness of it (and any relevant product) having regard to your circumstances. You should also seek independent financial advice prior to acquiring a financial product.