Why an SMSF loan could be right for you

A self-managed super fund (SMSF) could be the best way for you to grow your retirement nest-egg.

Negative gearing will allow you to purchase property that has more value than your SMSF loan may be worth, so making gains on your portfolio is simple. What’s more, using income from the properties in your portfolio can help to pay off your loan, making the repayments process much less stressful.

So, why should you get on board?

Take a leaf out of other Australians’ books

The Australian Taxation Office (ATO) released an SMSF statistical report for the June 2015 quarter, and it showed great increases over the previous quarter.

The number of new establishments for SMSF loans between the quarters was 6,417, pushing the figure up to 556,998 Australians, helping them add value to their retirement funds. The amount of money invested in residential properties from SMSF loans is also staggering, with ATO data showing more than $21 billion of loans for houses, units and apartments.

Holders of SMSF loans that have a value of over $10 million can also provide invaluable lessons about what areas to invest the funds in. 19.68 per cent of these high value investments are in term and cash deposits, while only 1.86 per cent target residential property, both domestically and internationally.

How easy is it to set up?

It might seem like SMSF loans are a taxing process to organise, but all you need to do is establish a trust deed and give the super fund trustee the power to control aspects of existing investments so that they have the required working capital to purchase property.

Once that is established, your SMSF fund can apply to lenders and begin the process of gaining capital for your retirement nest-egg, which is only good news.

Contact Redrock and see what SMSF solutions it has for you.