For the majority of us, buying property as an investment is something we would love to include as part of our retirement strategy. With property prices rapidly increasing all over Australia this can seem unachievable as deposits are higher than ever. Thankfully, there are avenues through which you can use your super balance to invest. If this has you wondering ‘how much super do I need to buy an investment property?’, then read on.
Can All Super Funds Invest in Property?
In short, no. Only approved self-managed super funds (SMSFs) can use their balance towards property investment. Should you have your super in an industry or retail fund you will not be permitted to access your balance until you reach pension age, though there are some exceptions to this, such as due to terminal illness or other extenuating circumstances.
The good news is, setting up an SMSF is possible for the majority of people that qualify. In order to qualify, you must meet the minimum requirements set by the government. On average a balance of $200,000 may be a sufficient amount to give you the opportunity to purchase property through your SMSF, however, that is only one of the many requirements that are considered before you can qualify to set up a Self Managed Super Fund and is based on individual circumstances. When it comes to determining a minimum balance to buy an investment property there are a lot of things considered and this may vary based on which professionals you engage with to support you through the process.
Setting up an SMSF has many benefits beyond just choosing your investments, but should still be considered carefully to ensure it is the right option for your needs. A consultation with a financial advisor in the Corbwood & Associates network can help you make this decision and create your SMSF.
How Much Super Do I Need to Buy An Investment Property?
The general consensus is that you should aim to have a balance in the vicinity of $200,000. This amount is considered optimal as it not only covers a deposit but should also cover associated fees and ongoing operational costs related to the fund and the property itself. But as mentioned before this may vary depending on individual circumstances and the professionals to decide to engage with.
Keep in mind that you are not permitted to use your entire super balance to invest, you must keep a liquidity buffer as per the conditions set out by the ATO, APRA and ASIC. Should you need additional funding to purchase the property, a higher super balance may also help you secure a more competitive loan.
Turn To Corbwood & Associates For Advice On Investing With Your SMSF
At Corbwood & Associates our team of professionals and trusted associates understand SMSF investing in depth. Our financial advisors will be able to assess individual circumstances to give you an idea of how much super you need to buy an investment property in a high-growth area. We are passionate about helping our clients create an abundant financial future through SMSF investing. Whether it is your first investment or an addition to an existing portfolio, our network of expert financial advisors can ensure you remain compliant and invest wisely.
In order to assess your individual circumstances, Corbwood & Associates can introduce you to our trusted financial advisors to best understand your personal financial position and best advice you going forward, and what your options may be if you qualify.
Stop wondering ‘how much super do I need to buy an investment property?’. Contact the SMSF investment experts at Corbwood & Associates today on 07 5609 8874.