Unlocking the potential of SMSF property investing

Surprising insights into SMSF property investing from fresh survey

Unlocking the potential of SMSF property investing

News

By Mina Martin

Self-Managed Super Funds (SMSFs) are increasingly being viewed by Australians as a viable means to secure a comfortable retirement, beyond traditional superannuation funds.

A recent survey conducted by InvestorKit and Agile Market Intelligence in late 2024 has shed light on the awareness and adoption of SMSFs among Australian investors, revealing some unexpected results.

Key survey findings on SMSF usage

Broad interest among investors

The survey highlighted a significant engagement in investment activities among respondents, with 88% owning various investment vehicles and 61% owning investment properties. Given these figures, the respondents are predominantly investors.

Detailed insights into SMSF property investing

SMSFs offer individuals the autonomy to make their own investment decisions, which can include a diverse array of assets like shares, residential and commercial properties, managed funds, cryptocurrencies, and collectibles, said Junge Ma (pictured above), senior research analyst at InvestorKit.

However, residential properties invested through SMSFs must strictly be for investment purposes, not for personal use by any fund members.

On the other hand, commercial properties can be rented to fund members for business purposes, following specific regulations.

Regulated by the Australian Taxation Office (ATO), SMSFs provide a structured yet flexible way to manage retirement savings with potentially lower tax rates, similar to traditional super funds but with greater control over investment choices.

Revealing statistics from the survey

Sixty per cent eligibility

The survey found that 60% of respondents have a superannuation balance of more than $200,000, making them eligible for an SMSF. Despite this high eligibility rate, many remain unaware of the benefits SMSFs offer.

Thirty-five per cent utilisation

Only 35% of those eligible are currently using SMSFs to manage their superannuation, suggesting a significant gap in uptake versus potential.

Knowledge barriers

A notable 39% of eligible respondents do not have an SMSF primarily due to a lack of understanding about setting one up or the benefits it could offer.

The role of expert guidance

The findings indicated that there is a substantial opportunity for financial education and professional advice to help eligible investors better understand and leverage SMSFs, particularly in property investing.

Companies like InvestorKit are positioned to provide the necessary guidance to navigate the complexities of SMSF setup and investment.

For more detailed analysis and to view the full report, click here to download the whitepaper, “The Evolution of SMSF Property Investing.” 

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