You can invest in property through many retail, corporate or industry superannuation funds or through a self managed super fund (SMSF). However the options for investing in property vary across different types of super funds.
In a retail, corporate or industry super fund, you may be able to invest in property indirectly. Many of these funds allow investments in listed property trusts or as part of a large diversified portfolio that makes investments in certain types of property such as infrastructure or commercial property. These indirect property investments can be accessed in an SMSF too.
In an SMSF, investments can also be made directly in residential and commercial property using your super. For example, a fund can buy business premises or an investment property. As trustee of your SMSF (or a director of the corporate trustee of the SMSF), you have greater control over which property (or properties) your fund is invested in. You choose which property to buy, manage the rent and any expenses and determine when it is time to sell.
Before buying property within an SMSF, it is important to understand superannuation law and other relevant law in this area. Importantly, the SMSF’s trust deed must enable property to be purchased and property must form part of your fund’s investment strategy. There are also restrictions on who you can buy the property from and who it can be rented to.
Some questions to consider include:
- What types of property can an SMSF buy?
- Can I borrow to invest in property in my SMSF?
- What are the benefits of investing in property?