With the introduction of self managed super funds and the wealth of benefits associated with making contributions I was wondering wether anyone had investigated setting up their own super fund and investing that money into either IPs or their own home.
Is it possible to set up a self manged super fund, use already accrued super as a deposit and use government co-contributions to help pay off your mortgage?
I realise this may be a naive question due to the complexities associated with super, but would love to share in any contributions others have made into this issue.
Cheers[smiling]
Hi,
Super funds cannot borrow money, so you could use your self managed fund to buy properties but only if you do not need any finance.
Hi gwkite,
Love your thinking.
Unfortunately ,as with alot of good ideas, there’s rules against it.
Investing in property through Super can definately be done but, as pucci points out, as a general rule Super funds can’t borrow money.
If you had $2million in super, and wanted to buy a unit for $250K then it’s a possibility but unless you have enough in their to fund the whole purchase it makes life quite difficult.
Plus, rules governing super place stringent reg’s on investment such as the need to diversifiy. Hence, it would probably not be sufficent to have just enough to cover the purchase, you’d really need other investments in their as well.
At the end of the day I guess it makes sense though – the government doesn’t want a bank to be able to take your financial future if you default on the loan and you really don’t want your whole financial future invested in the one spot anyway.
After all is said and done you can still get property exposure in Super through Listed/Unlisted Property trusts, joint venture development projects and various other passages.
Its just the common ‘buy an IP an rent it out’ generally can’t be done.
PLEASE NOTE – this is not financial advice, should not be seen as any form of advice, does not take into consideration your personal goals and objectives and in no way should be relied upon. [king]
This subject has been covered many times over so try doing a “Search” on this forum.
Amanda
“It is better to be inconspicuously wealthy, than to be ostentatiously poor…”Thanks all.
I thought that it may have been covered before and did a search in “All Forums”. I’ve since repeated the search just in this forum and found plenty of info.
[blush2]
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