PROPERTY IN A SMSF
By Craig Wright – Head of Investment Property @ RUN
A few years back, I was exploring other ways I could continue to invest in property and grow my portfolio.
I discovered there were some recent changes to the Superannuation Act which enabled me to now borrow funds for investment, with my superannuation as the deposit. With any new legislation, there was a quick learning curve.
I was very disappointed with the performance of my Super in a major Super Fund. The balance of my fund reduced by almost $60,000 overnight. With my partner, we rolled our super together into our own fund. We purchased our next investment property inside the fund, and have not looked back. Our cash flow on this property is neutral and it costs us nothing to hold. The property continues to perform well on growth and rent. We have much more control creating our longer term security, and still have diversification within our own super.
Since the changes to Superannuation to allow direct property investment, lenders and their policies, the set up and costs of your own fund have progressed in leaps and bounds. This is by far one of the fastest growing sectors of the property and financial services world. It is envisaged by 2015 there will be approximately $1.3trillion in SMSF. DIY funds currently account for 32% of all super funds in Australia.
Property in SMSF is a very powerful, dynamic strategy – which includes significant value for investors with tax and cash flow benefits.
For more information, contact Brett Hansen, Partner