Using your super to upsize your property portfolio with an SMSF

Our team at DDP Property helps to makes this possible. In fact, we’ve now helped more than 2000 clients with a super balance or combined super balance of $100,000 minimum to purchase their ideal property over the last ten years.

Everyone dreams of retiring with financial security and stability to enjoy the golden years.

This involves having a strong superannuation strategy. Many Australians now diligently contribute to their own super fund and work hard to boost their balance today for the future. But did you know there’s a smarter way to grow your retirement wealth by using your super to buy an investment property?

Let’s explore your options around how it works, and how this can help you achieve the best results for your own retirement plan.

Optimising your superannuation with property

At DDP Property, we believe that all investors should at least consider using their superannuation to buy an investment property through a self-managed super fund (SMSF).

It offers you so many advantages and can give you more control over your super.

If you have an SMSF with sufficient funds, you can purchase a property outright without the need to borrow money. However, if you don’t have the funds upfront, the other option is to use your SMSF to secure a property loan. If you have enough, you can use your super to fund the 20% deposit for the property and borrow the remaining 80% from a lender.

As an example, a $400,000 property would approximately require an $80,000 deposit, plus stamp duty and other costs – so you could take around $100,000 from your SMSF to cover the deposit and additional costs and seek the help of a lender to borrow the rest.

The benefits of investing in a property through your SMSF

There are several reasons why investing in property through an SMSF is becoming more attractive to investors nowadays. 

An SMSF not only gives you flexibility and control over your superannuation and retirement, but it also provides the following advantages when used to invest in property:

1. Stable returns from rental property portfolios

With property values soaring nearly 15% in the past 12 months in Australia’s five biggest cities, we expect property to be a sound investment for the long term.

An SMSF provides you with the funds to easily invest in property and take advantage of the current market.

2. The long-term benefits outweigh the outlays

Setting up an SMSF brings with it its own costs such as upfront set-up fees and expenses for yearly tax reporting and audit compliance.

However, the ability to access your super for a deposit that you would otherwise not have been able to obtain, and the financial benefits this provides in the long term, far outweigh the initial costs of setting up your SMSF.

We can also help you to create additional structures to purchase an investment property using your SMSF.

3. Cashback for investors who buy new properties through DDP Property

Commissions, marketing fees and referral fees can be a huge hurdle to overcome. For instance, if you’re buying a brand-new house and land package for $500,000, over $25,000 will go towards these fees.

With DDP Property, our buyers simply pay one fixed fee for our services, after which we then rebate some of these fees that we have received back to you in cash.

This cashback can help you after your property purchase, especially if you put it back into your SMSF to use for future investments.

Looking to purchase a property with your SMSF?

At DDP Property, our expert financial team is always ready to assist you with your needs, as well as help you to learn more about how you can purchase property through your SMSF.

The DDP Property approach to upsize your property portfolio

Using your SMSF to buy a property does come with some rules and regulations that you must comply with. 

One of the most important to remember is that you can only purchase the property for investment purposes only. Any property purchased through an SMSF cannot be lived in or rented by you, the other fund members, or any other related parties of fund members.

Taking these restrictions into account, it’s important to find and invest in a property that will maximise your returns.

Our team at DDP Property helps to makes this possible. In fact, we’ve now helped more than 2000 clients with a super balance or combined super balance of $100,000 minimum to purchase their ideal property over the last ten years.

Our strategy involves sourcing properties in high-growth, high-demand areas. We look for lower-priced properties in hot-spot areas where projected growth is around 5-7% year on year, with a high rental yield to cover expenses, so there’s no need to further dip into your super balance or future employer contributions.

So, do you want to use your super to buy an investment property?

This can be a smart strategy when set up and implemented correctly.

Using your superannuation to boost your property portfolio brings with it its own benefits as well as risks. Depending on your circumstances, it can have a positive or negative impact on your retirement funds in the future.

This is why it’s important to seek financial advice first to determine if buying an investment property through your SMSF is the best option for you.

If you would like to learn more, then we are here to help you. At DDP Property, our expert financial team is always ready to assist you with your needs, as well as help you to learn more about how you can purchase property through your SMSF.

If you are looking to purchase a property with your SMSF, send us a message today and secure your guaranteed cashback offer with DDP Property. T&Cs apply.

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