Invest in real estate with your super

Having an SMSF is the only way you can directly use your super for investing in real estate, which for many Australians, is a much safer investment option and an asset they are familiar with.

As a Squirrel self-managed super fund can have up to four members, you are also provided with the opportunity to pool your money together and increase your investment opportunities.

To give you an example, if you personally have $35,000 in super, and your partner also has $35,000, and you combine your super money, then the total of $70,000 in super can be used to take out a mortgage on an investment property. You can not do this with a retail fund.

A balance of $70,000 in your SMSF account should allow you to take out a mortgage for a property valued at around $200,000.

Let’s say that you have an annual salary of $60,000 plus super. When you combine the rental income generated by your investment property with the 9.5% compulsory super that your employer has to pay into your SMSF, then this will be enough on average to service the loan repayments, as well as cover expected maintenance and upkeep on the property.

This will provide a buffer to cover most unexpected costs that may occur, and if these unexpected costs don’t occur, then the cash will grow in your SMSF fund – maybe it will grow enough to purchase a second property.

Based on data obtained on 5/10/2016, for $220,000, you can currently purchase houses or apartments across 520 different suburbs in Australia. Now you can tell your retail fund where to go.

Happy house hunting!