SMSF Property Investment

Super Fund

A growing number of Australians are turning to self-managed superannuation funds (SMSFs) to invest in property, taking advantage of flexible financing options and the potential for higher returns than traditional superannuation funds. Recent data highlights a 26.4% increase in SMSF allocations to residential properties, reaching $55.2 billion, and a 25% rise in non-residential property investments, hitting $102 billion by mid-2024.  

This surge in SMSF property investments stems from improved lending conditions and growing dissatisfaction with traditional super funds. SMSF loans now offer competitive terms, including higher loan-to-value ratios (LVRs) of up to 90%, making property purchases within an SMSF more accessible than ever. Lenders are also recognizing future super contributions in borrowing assessments, providing flexibility for self-employed individuals who might have irregular contribution histories.  

Why property through SMSFs?

Property investments within SMSFs offer unique advantages, particularly in leveraging funds for greater returns. For example, investing $200,000 in super to purchase a $1 million property generates capital growth on the full property value, not just the initial contribution. This ability to amplify returns has drawn investors seeking more dynamic growth opportunities compared to the modest performance of many traditional superannuation funds.  

Furthermore, research shows SMSFs have consistently outperformed traditional funds, particularly during volatile periods. A University of Adelaide study found that SMSFs outperformed traditional super funds by an average of 4.1 percentage points in the 2021–22 financial year, showcasing their potential for greater long-term returns.  

Commercial properties have also gained traction among SMSF investors. Business owners can lease premises to their own operations, ensuring rental income returns to the fund. Additionally, investors can participate in syndicates to access larger commercial assets, diversifying their portfolio while retaining the financial security offered by SMSF-specific borrowing structures.

Lower Entry Barriers

Historically, SMSFs were perceived as viable only for those with significant superannuation balances. However, this narrative has changed with the availability of more affordable setup costs. Today, individuals with balances as low as $150,000 can establish SMSFs, enabling a broader pool of investors to enter the market and take control of their financial future.  

Another appealing aspect of SMSF loans is their limited recourse borrowing arrangement, which ensures that borrowing within an SMSF does not impact personal serviceability for loans outside the fund. This structure allows investors to grow their property portfolios without compromising their ability to finance personal goals, such as upgrading their family home or purchasing another investment property outside their SMSF.

How Success Avenue Property Consulting Helps?

Navigating SMSF property investments can be complex, but with the right guidance, it can lead to tremendous financial growth. Success Avenue Property Consulting specialises in helping investors unlock the full potential of SMSFs by providing expert advice on setup, property selection, and leveraging strategies.

Success avenue ensures compliance with regulatory requirements while optimising returns, giving investors the confidence to diversify and grow their portfolios.  

Whether you’re looking to purchase residential or commercial properties, Success Avenue Property Consulting offers tailored solutions to meet investment goals. Partner with them to make the most of the evolving property landscape and secure your financial future through SMSF property investment.

Conclusion

With flexible financing, proven returns, and lower entry barriers, SMSF property investment is an attractive avenue for Australians looking to grow their superannuation wealth in 2024.

Success Avenue Property Consulting is a trusted partner in navigating this journey, ensuring investments deliver maximum value while aligning with long-term goals.