Newspaper article Fraser Coast Chronicle (Hervey Bay, Australia)

How to Use Super to Buy Property

Newspaper article Fraser Coast Chronicle (Hervey Bay, Australia)

How to Use Super to Buy Property

Article excerpt

FOR most Australians, superannuation is a

relatively simple proposition.

You or your employer make regular

contributions into an industry

superannuation fund of your choice, and

that money is then invested on your behalf

- usually into shares - so that by the time

you reach retirement, your super balance

has grown large enough to allow you to live

comfortably for your remaining years.

But, there are a number of Australian

super investment options, and an

increasing number of people are taking

control of their own superannuation by

opening a SMSF, or a self-managed super

fund, giving them the ability to decide for

themselves when and where their super

will be invested.

That also includes real estate investment

properties, which are able to be purchased

through that SMSF.

Using super to invest in property: The

basics

While you can't access your

superannuation to buy yourself a house to

live in, you are able to use it to buy

investment properties.

You do that through your SMSF, which is

a fund that can have between one and four

members and allows the members to

make their own collective decisions about

how their superannuation is invested.

This could still mean investing in shares,

of course, but with property markets

experiencing stunning growth over the last

decade, many people have instead

included property as part of their

investment strategy and their retirement

plans.

Setting up a SMSF is a highly regulated

process, and it is advised that you seek

professional financial advice in order to

understand your responsibilities and set up

the fund correctly.

The SMSF's members (trustees) are also

required to have a documented investment

strategy, which is a detailed financial plan

based on the current and future needs of

each member of the fund. …

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