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Find out why the use of Self Managed Super Funds (SMSFs) to buy investment property has received a lot of negative press in the media recently. And we give you five tips so you’ll know exactly when to steer clear of nasty unlicensed property businesses.

It’s a dangerous situation. Unlicensed businesses such as real estate agents and property spruikers who promote SMSFs as a way to purchase direct property, with their own best interests as priority over the best interests of their clients.

This is a shame…

Investing in property with SMSF can be a very powerful strategy – for those who are in the right position. We repeat: investing in property through SMSF certainly isn’t for everyone, as some would have you believe.

The problem is that ‘property investment advice’ is currently an unregulated industry that crosses dangerously into the territory of the highly regulated financial planning industry.

Surprising but true. Property investment advice is unregulated, despite the complex environment and serious financial impact it could have on a person’s future.

Unfortunately, it’s a very common occurrence. It’s also a very worrying one that has driven Senator John Williams to launch an inquiry into why ASIC is taking so long to address SMSF property spruiking cases.

Tips to avoid nasty SMSF property rogues

1. Don’t rush

Take your time. Don’t rush or be rushed into making a decision.

2. Focus on strategy before property

The strategy comes first and the property comes second. Not the other way around.

3. Get SMSF financial advice

Make sure you seek advice from a good financial planner who specialises in SMSFs who will take your whole situation into consideration and assess whether this is right for you.

4. Set up properly

If SMSF is right for you, make sure you get everything set up completely before you start looking at property options. Set up can take 2-3 months (or even more) if starting from scratch. You don’t want to commit to a property during this time as lots of things can happen which may prohibit you from completing on that purchase.

5. Get property investment advice

Once set-up completely, consult with a property investment advisor who can work with the strategy that you and your financial planner have put into place. When interviewing your advisor ask them what their qualifications are – make sure they have Professional Indemnity Insurance to give property investment advice. All advisors that are accredited with the ASPIRE Advisor Network have this.

Buyer beware

I don’t think we are too far off seeing at least an introduction to regulation. We look forward to that day, and in the meantime, please beware the nasty property rogues.

Photo credit: Temari 09 – Temstock Winter Fox (flickr)


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Nick Holden

Nick Holden is the Founder of Simple Property Investment and an insured, qualified Property Investment Advisor under the ASPIRE Network industry body. He is a Licensed Real Estate Agent, holds a Diploma of Financial Services (Financial Planning) and Cert IV Financial Services (Finance and Mortgage Broking). As there is no 'one size fits all' with property investment, he is on a mission to help ordinary Australians create wealth for their futures with personalised strategies and advice.