Buying Property with a Self Managed Super Fund (S.M.S.F.)


More and more people are starting their own super fund and as this trend continues to grow, now may be a good time to elaborate a little as to how to go about starting one’s own super fund.

Firstly and foremost we must point out this Real Estate Office is not an expert in Superannuation Fund purchases.

However, having come across this situation numerous times we do like to contribute some details in an effort to remove some myths, restore some facts and apply some simple commonsense.

The following details were brought to our attention by a reputable source and this source states the following:

  1. Firstly, one sees a Financial Planner to have an analysis done, whether it is to your advantage to have a S.M.S.F. We point out that banks are not qualified to do this. This Planner will put a strategy in place that suits your situation.

Many people think they can see an accountant, but you need an experienced Financial Planner or Accountant who
understands the financial, super and taxation sides.

  1. Your Planner will give you a statement of advice. This statement is nothing mysterious and covers what that strategy involves.
  1. You are now in a position to create your own Self Managed Super Fund which will be set up by your Accountant or approved Planner.
  1. Meet with your bank or your Financial Broker that is familiar with Self Managed Super Funds purchases. Your Banker/ Broker will work on the purchase price within your financial reach and how much you will be required to contribute, what rental yield you will apply and how that fits with banking guidelines.
  1. A Solicitor will now need to be engaged, to form the Self Managed Super Fund Trustee.
  1. Locate the property of your choosing as you are now in an excellent position to shop around, as you now know that you have ticked all the boxes and have your Banker/ Broker’s backing and the necessary finance will be able to be obtained.
  1. Once you decide on a property, it will be valued and the loan will be approved, contracts of sale signed and exchange of contracts takes place.
  2. On settlement it will be owned by your Super Fund, to the trustee. You can now rent it out and you are on your way.

So now that you have done all that, and your S.M.S.F. will grow as it received rental income plus your personal contributions.

Now looking into the future, there is no reason why your S.M.S.F. can’t grow and acquire additional property as time passes, as you must stay in touch with your Financial Planner/ Accountant on a regular basis.

So you will now undoubtedly understand why Self Managed Super Funds are becoming the New Australian Dream. It gives you freedom to navigate your own financial retirement future together with your financial Planner’s advice.

We trust this guide is of some assistance to you, the reader.