There are many ways you can invest the funds in your self-managed super fund (SMSF). One possible strategy is to get a loan to bolster your SMSF, then use that money to invest in property. When you go this route, the hope is that your property will appreciate in value over time, and you'll make more than enough capital gains to repay the loan you've taken out.
Why is an SMSF loan great for your investment portfolio? How can you pursue this strategy optimally?
Is this the best strategy for you? It's often hard to decide. A lot of the investment literature out there comes off sounding too highfalutin and confusing for ordinary people who are just getting into investing. If you're like most people, you're just looking for a straight answer. Why is an SMSF loan great for your investment portfolio? How can you pursue this strategy optimally?
The benefits of buying SMSF properties
The beauty of buying an SMSF property is you're getting into a very stable market. People are always going to need housing, so your property is certain to have value. Unlike with certain other stocks and bonds, you don't have to worry about the value of a house going bust if you have a bad year.
Having said that, there are some stringent rules in place about investing in property with an SMSF, according to the Australian Securities and Investments Commission. For example, you can't be living on a property that you invest in, nor can anyone involved with your fund. You can't acquire the property from anyone involved, either. SMSF property investment can be a great opportunity, but only if you play by the rules.
Crafting a brilliant investment strategy
How will you go about crafting a foolproof strategy for boosting your investment portfolio? Your Investment Property Mag recommends trying to predict the next big thing in real estate, thus staying one step ahead of the game.
In other words, don't buy a house in a city that's already wildly popular – its value may have already peaked. Instead, look at the suburbs of that city, where prices may go up next. If you can use strategies like this to predict future values, you can add significantly to the value of your SMSF.
Handling your investments the right way
There are many advantages of managing an SMSF investment yourself. Most importantly, you have total control over your own decisions. You choose when to buy and sell your properties, and you can do it at the best time to maximise your capital gains.
Is getting an SMSF loan a good idea? It is if you've got the financial savvy to invest wisely and make the most money possible from the transaction. At Mortgageport, we can help make that happen. Talk with our team today to get expert advice and a tailored SMSF property loan that will work for you.