Should You Buy Property in Your Super

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Investing in real estate is a proven way to build long-term wealth, but many investors are now turning to Self-Managed Super Funds (SMSFs) to expand their portfolios. While SMSF property investment was once uncommon, it has surged in popularity. Why? Because it offers unique advantages that standard investment methods don’t.

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What Is a Self-Managed Super Fund (SMSF)?

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An SMSF (Self-Managed Super Fund) allows you to manage your super yourself, rather than having it handled by a retail or industry super fund.

Key Differences Between Traditional Super & SMSFs:

• Traditional Super: Managed by financial institutions that invest your money in shares, bonds, and property on your behalf.
• SMSF: Gives you full control over your investment strategy, including the ability to buy property.

One of the biggest advantages? You and your partner can pool your super balances together. If you each have $100,000 in super, combining your funds gives you $200,000—enough for a property deposit, which wouldn't be possible individually.

⚠️ Note: SMSF property investment comes with specific rules and tax implications. Always consult an expert before setting up your fund.

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How Many Australians Are Using SMSFs?

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As of September 2024, SMSFs manage a staggering $1.02 trillion, with 1,151,619 members actively using them, the Australian Taxation Office reported. 

Why the surge in SMSF property investment?

A major reason for this trend is borrowing capacity. If you’ve maxed out your borrowing limit under your personal name, you may still be able to secure a loan through your SMSF, using a different lending structure. This allows investors to continue expanding their portfolio even when personal finance constraints exist.

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How Much Do SMSF Investors Have?

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The average SMSF balance per member has grown from $680,619 in 2018-2019 to $835,265 while median assets have increased from $395,836 to $497,608.

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The average balance for female members saw a 26% increase over the 5 years leading up to 2022–23. During the same period, the average balance for male members increased by 22%.

Most SMSF investors fall into four categories:

1. The Controller – Prefers full control over investments.
2. The Self-Directed Investor – Manages investments alone, without professional help.
3. The Coach Seeker – Wants guidance but remains hands-on.
4. The Outsourcer – Prefers to delegate decision-making to professionals.

99.9% of Search Property clients fall under “The Outsourcer.” They know they want SMSF property investment but don’t want the stress of managing it alone—so they partner with expert buyers' agents.

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Where Are SMSF Investors Putting Their Money?

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In December 2024, the SMSF Asset Allocation (as of December 2024)

• 161.44 billion dollars – Cash & Term Deposits
• 109.7 billion dollars - Non-residential real property
• 58.3 billion dollars - Residential real property
• 61.93 billion dollars - Listed Trusts
• 72.0 billion dollars - Limited Recourse Borrowing Arrangements
• 277.6 billion dollars - Listed Shares

Most investors assume SMSFs are just for stocks and bonds, but residential and commercial real estate is growing as a preferred asset class.

How Kevin & Anna Used Their SMSF for Property Investment

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Now, this shows what’s possible when leveraging money: Kevin and Anna wanted to supercharge their SMSF property investment portfolio by investing in property. Their situation:

• Balance: $300,000 pooled together.
• Goal: Buy two properties using leverage

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Their SMSF Investment Breakdown:

• First Property: $502,000
• Second Property: $455,000
• Total Assets: $957,000
• Cash Reserve Left: $50,000

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Projected Growth (10-20 Years)

• 10 Years: Portfolio worth $1.158 million
• At Retirement (Age 60): Portfolio worth $2.5 million (fully paid off)
• Rental Income at 4% Yield: $101,000 per year

Kevin & Anna’s SMSF property investment strategy ensured that by age 60, they would own $2.5M worth of real estate, generating $100,000 annually—without touching the principal.

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Is Buying Property in Your SMSF a Good Idea?

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If structured correctly, SMSF property investment can be a game-changer. Key Considerations Before Investing:

1. Ongoing SMSF costs – Management fees, compliance costs, and loan interest.
2. Cash flow management – Ensure rental income covers expenses. 
3. Long-term growth potential – Select the right properties in high-growth locations.

Many investors try to do this alone and make costly mistakes. That’s why working with experienced buyers’ agents ensures you maximize returns while avoiding pitfalls.

If you’re serious about building long-term wealth through property and are considering using your SMSF, we can help. Book a FREE strategy call with our team at Search Property and start your SMSF investment journey today.