While they say money cannot buy happiness, it certainly makes life a great deal easier when you know you are well set off. With consumerism having such a significant role in today’s society, it is difficult to stay immune to being involved in reckless shopping. We have so many choices around us, from all the varieties of food and clothing to technological gadgets, and it is only natural to find ourselves buying things, no matter whether we will actually make much use of them or not. Though having a job offers a feeling of security to some degree, this world is more susceptible to changes and it is not always sure if your current job will get you to a pension. The difference from life in the past is that nowadays we have many opportunities, even the chance to take matters into our own hands and secure our future.
All this is possible through setting up funds, also known as superannuations, and the reason their number keeps on increasing in Australia lately is due to the chance of managing your financial assets to ensure retirement. It is important to remember that though there is a certain degree of freedom, it all has to be carried out in accordance with ATO (Australian Taxation Office) regulations, otherwise penalties would have to be paid. Along with the sense of safety, perhaps one of the most convenient aspects of a superannuation is that you can invest through it. With SMSF borrowing to buy property is your opportunity to make a wise investment that would serve you in the long run. When you find a reliable agency and professionals, you can rest assured your SMSF will function well obliging all regulations.
When you decide to use SMSF borrowing to buy property, you have to have in mind that everything has to follow the sole purpose test that ensures everything is done for your retirement funds which cannot be used prior to retirement. The property you invest in must not belong to some of the members of your fund (if there are more trustees) or family and must not be used for rent or be inhabited by any of the trustees or someone related to them.
Property that can be invested in can be either residential or commercial. To be able to make the right choice that would work well for all members of the fund, it is advisable to create a strategy with the objectives in mind. In case there are not enough funds within the SMSF, money can be borrowed from banks as well as from members of the fund and the lender will require guarantee from all the trustees. When the bank lending is less than 60% of the property’s value, guarantee will not be needed and the loan sum can be repaid by contributions and rental income. Set up your SMSF and have a foolproof future with the help of investments.