Changes to superannuation legislation have made it possible for your SMSF to borrow to invest in real estate. There are a number of potential benefits when using a SMSF to invest in property:
- The SMSF portfolio can be diversified to include real estate with a direct residential property investment not solely through a managed fund.
- You may be able to reduce the loan faster by salary sacrificing additional funds to make repayments^.
- The trust can offset the loan’s interest and other expenses against rental income from the property. This could result in potential tax deductions depending on the particular circumstances of the SMSF.
- Lender’s recourse is limited to the property itself. Other assets within the SMSF are not put at risk.