borrow-money-to-buy-in-super

Can you borrow money to buy property in super?

borrow-money-to-buy-in-superI love it when a curly question reaches my inbox as it makes me realise just how many facets there are in relation to property investing – and it also reinforces just how important it is for investors to get a property education.

This week’s out of the box question comes from Kathy, who wants to know: Is it possible to buy a house and land package within my superannuation fund?

Kathy has $200,000 saved within her super fund and in order to buy a house and land package as an investment, she would need to borrow $340,000.

So far she has approached both NAB and CBA for finance, but both of them are reluctant to lend her any money.

Kathy wants to know: Is there any way of making this happen?

First things first: I’m not a financial planner so I’m not qualified in any way, shape or form to give advice pertaining to buying property within a SMSF. It is my understanding that there are a few financiers out there who are able to fund property purchases such as these, but I’m not sure who they are or what the terms and conditions are.

So to Kathy (and to anyone else who is pondering a similar type of investment) I would like to invite you to email me directly at helencollier-kogtevs@realwealthaustralia.com.au.

I can put you in touch directly with an experienced financial planner, who is going to be able to give you some up-to-date and personalised advice regarding this type of investment.

While I don’t have all of the answers for this particular scenario, what I like about this question is that it raises a bigger issue: the importance of building your dream team.

Investing in property doesn’t happen in a silo. You can’t make all of the decisions, all of the time, all by yourself – you have to defer to your expert dream team from time to time to be sure that you’re making informed decisions.

When I’m advising my students about building their dream team, my advice is think about what your end goal is – financial freedom and wealth – and who you need on your side to help you achieve that outcome. In my experience, this will often include experienced and qualified professionals and experts in the following fields:

  • Mortgage broker
  • Property investing coach or mentor
  • Financial advisor
  • Tax accountant who specialises in property investing
  • Conveyancer or lawyer
  • Property manager

There may be other experts you use from time to time, such as building and pest inspector when you buy a property, or a quantity surveyor when you’re getting a depreciation schedule prepared.

But the above list of experts should be on your roster of regulars: these are the people you should check in with before you make a property-related decision.

Yes, it might cost you some money along the way in consultant’s fees. However, these decisions could impact your wealth for the long term – so isn’t it worth investing a small amount of money along the way, to reap the bigger financial rewards down the track?

Do you have a burning question about your properties, your finance structures or any potential rental properties you’re considering investing in?

To add your query to the pile, please click here. And look out for my 2 Cents reply in an upcoming episode of my 2 Cents Tuesday podcast!

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