Self Managed Super Funds are becoming increasing popular amongst shrewd investors. SMSFs now maintain a third of all super cash invested by Australians. So what are self managed super funds advantages over other superannuation provisions. The big appeal of SMSFs is that investors will have control over where any super cash is to be invested. SMSFs will also save on administration fees and can assist you in obtaining optimum tax breaks.
The SMSF loan is secured against the investment property and repayments are ideally paid by the rental income from the property. SMSF Trustees are able to borrow up to 70 percent for a residential property; alternatively it is 60 percent for a commercial property. This is an excellent strategy for making money out of the increasing high property rents. Key advantages are;
A key difference of SMSF borrowing over normal commercial and residential loans is that there will be limited recourse; in other words the creditor’s claim on the assets of the fund is restricted to recovery of the secured property asset itself.
Additional information on self managed super funds; http://www.ato.gov.au/superfunds/content.aspx?doc=/content/00182478.htm