Using Super to Buy Investment Properties in Melbourne is a popular strategy amongst Australian property investors. But it isn’t for everyone, and you’ll need to understand the rules, costs and risks before getting started.

Using Super to Buy Investment Properties in Melbourne  residential property through your SMSF if you meet certain conditions and are a member of a self-managed super fund (SMSF). If you’re buying a new house, you’ll need to contribute at least $10,000 of personal pre-tax contributions to your SMSF before you can use those funds for the deposit. You can also save additional money through the government’s First Home Super Saver Scheme (FHSS) if you’re buying your first property.

If you decide to borrow in your SMSF, the trustee will usually place the property in a separate trust, called a limited recourse borrowing arrangement. This means that if you are unable to repay the loan, the lender can only seize property assets in the separate trust and not your own personal assets.

Maximizing Returns: The Pros and Cons of Using Your Super to Secure a Melbourne Property

It’s best to talk to an expert before deciding to invest in property through your SMSF. It’s essential to understand the strict rules and considerations that apply, and the penalties for non-compliance can be severe.

While there are a lot of advantages to purchasing property through your SMSF, it’s important to take the time to research the market and build a well-diversified portfolio. This will lower the risk and improve your returns. If you need help finding the right properties for your SMSF, get in touch with the team at Gerard Partners today.