You can invest in property through Self Managed Super Fund or SMSF. This became popular recently since it became possible to borrow money to fund a direct property purchase for an SMSFs.
You must be careful if you opt to invest in property. We highly suggest to discuss with a professional accountant like United Business Services (UBS) before proceeding. Here is a small guide that may get you started.
SMSF INVESTMENT IN RESIDENTIAL PROPERTY
The very first thing to remember is that you yourself can not live in the property purchased through Self Managed Super Fund. Now this is not only applicable to you but also to any other trustee or anyone related to the trustees.
You cannot rent this property as well. Same goes for trustees and relatives. There is a common misconception that as long as you are not living in the proper and it is your holiday home then it is okay for you to buy the property through SMSF. This also is incorrect. .
SMSF INVESTMENT IN COMMERCIAL PROPERTY
Buying a commercial property is one of the most popular ways to invest in property thorough Self Managed Super Fund. Therefore commercial property (for business) can be purchased by an SMSF and can be used by members and related parties, providing this is done one an arm’s length basis.
An important thing to remember is that the rent paid for such a property (by the members of SMSF) must be at the market rate (no discounts) and must be paid promptly and in full at each due date.
The investment must also satisfy the overarching function of the SMSF which is to provide retirement benefits for its members. Also you must ensure the purchase provides a retirement benefit for all the trustees.