It’s a beautiful time of year as we approach the dawn of spring. The mornings are brighter, the sun rises earlier, and the warmth slowly seeps back into the air. There’s something special about this time of year; it’s a season of promise and potential, much like the subject we’ll be exploring today: self-managed super funds (SMSFs) and their growing popularity among property investors at Teach Me About Property.
This week, we’re excited to kick off a series of discussions on SMSFs and the six main reasons why people choose to invest in property through their superannuation:
- Property as a Trusted Asset Class
- Avoiding Volatility of Other Assets
- Access to a Deposit
- Tax Effectiveness and Retirement Income Strategies
- Using Employer Contributions to Pay Off Loans
- Access to Gearing
Today, we’ll start with the first reason: property as a trusted asset class.
Why Property?
Property has long been a cornerstone of the Australian investment landscape. It’s an asset class that people understand and trust, largely because it’s familiar. Whether you’re a homeowner or a renter, you’ve likely experienced the ups and downs of the property market.
Many Australians have either profited from the property market or know someone who has. This familiarity breeds trust, making property a go-to choice for many investors. Unlike more complex financial instruments like derivatives or cryptocurrency, property is straightforward. It’s tangible, it’s real, and it’s something most of us have interacted with at some point in our lives.
The Simplicity and Safety of Property
The beauty of property lies in its simplicity. It’s a relatively safe asset class compared to others. There’s a common saying in the property world: “Buy land; they’re not making any more of it.” This reflects the enduring value and scarcity of property, particularly in Australia.
Over the last 200 years, the Australian property market has demonstrated remarkable stability and growth. Even during the past 50 years, marked by seven major recessions and soaring interest rates, property has consistently increased in value. This resilience has cemented its reputation as a reliable investment.
Taking Control of Your Superannuation
Many Australians rarely check their superannuation balances or know where their money is invested. With a self-managed super fund, you have the power to make your own investment decisions. Instead of entrusting your money to an unknown manager, you can take charge and invest in property—a familiar and trusted asset.
This approach not only offers peace of mind but also enhances your understanding and awareness of your retirement funds. By investing in property through your SMSF, you can answer the question of where your money is with confidence: “I have a self-managed superannuation fund, and I’ve invested it in this property.”
What’s Next?
Over the next few days, we’ll explore more reasons why people are turning to SMSFs to invest in property. Each day, we’ll delve into one of these reasons, providing insights and guidance for those considering this path. Join us in this journey to better understand the opportunities and benefits of investing in property through your super.
Information from Teach Me About Property is intended to be general in nature and is not personal financial product advice. It does not take into account your objectives, financial situation or needs. Before acting on any information, you should consider the appropriateness of the information provided and the nature of the relevant financial product having regard to your objectives, financial situation and needs. In particular, you should seek independent financial advice and read the relevant product disclosure statement (PDS) or other offer document prior to making an investment decision in relation to a financial product (including a decision about whether to acquire or continue to hold).
