While it’s tempting to borrow to buy property for an SMSF, getting the right advice is imperative.
Using superannuation to buy an investment property is becoming immensely popular with baby boomers. Do-it-yourself super is by far the fastest-growing segment of superannuation, with about $14 billion in superannuation being transferred out of externally managed funds each year and put into self-managed super funds.
For many SMSF trustees, property ticks all the right boxes. While rent is usually a steady, reliable income, once you’re on a pension, you can sell properties free of capital gains tax.
But if you intend to hold property in an SMSF, you need high-quality, unbiased advice. This applies not only to the way you set up and administer an SMSF, but also to advice about the type of property in which to invest.
It’s all too easy to be burnt financially if your SMSF borrows to buy an underperforming asset. The chances of falling victim to a spruiker or an unethical adviser are also quite high.
The Australian Securities and Investments Commission is devoting more time and energy looking at risks in the self-managed superannuation sector.
Tags: investment, news, real estate, self managed, super funds, superannuation
