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Borrowing through your Super Fund?

  • Wednesday, June 07, 2017
  • Collins Mann

Thinking of Borrowing Through Your Superannuation Fund??


Consider this first….

With Australian superannuation funds now nearing $2.2 trillion in total, this pot of gold is very tempting if you are keen to get into the property market.

Borrowing within a Self-Managed Superannuation Fund (SMSF) seems a logical way to access the deposit required to purchase an investment property. There is however one catch you need to be aware of.  We never hear about this, but I have had a personal experience that demonstrates the pitfalls.

I used my SMSF to assist with the purchase of an investment property on Queensland’s Sunshine coast. Property markets in Sydney and Melbourne were booming, but the price of my unit after the GFC was reducing in price every year. Add to this, shortfalls in rental income, rates, body corporate, etc, all of them funded through, you guessed it - my SMSF.

Funding the shortfalls this way didn’t however affect my day to day living. I could still go out when I wanted, go to the movies, restaurants etc and generally lead my life how I wanted. The cash that was propping up my poor investment choice was coming out of my SMSF.  Retirement was a “far off” event, so I didn’t worry.

The result was that I kept a poorly performing asset for far too long. If it had been affecting my hip pocket every time I needed to cover costs associated with the unit I would certainly have reviewed and sold this “dog” of an investment much sooner than I did. The result was that my superannuation balance was significantly depleted. This will result in reduced “super” down the track when I will need it.

All investment decisions come with choice and missed opportunities. Before you look at any options it is important to know where you are financially - right now. Our free App Nettshell can help to bring all your financial data together in a “nutshell.” This gives you an accurate financial starting point and an indication if you are on track to purchase that investment property.

Take back control of your financial situation today and don’t make the same mistake I did.


Collins Mann ABN 88 098 705 152 is a Corporate Authorised Representative of Hunter Green Pty Ltd AFSL No. 225962. Managing Director Russell Mann (Authorised Representative No. 273590) is an authorised representative of Hunter Green Pty Ltd ABN 12 087 491 629 which is the holder of Australian Financial Services Licence No. 225962.

The information contained within this website does not consider your personal circumstances and is of a general nature only. You should not act on it without first obtaining professional financial advice specific to your circumstances. This website holds information for Australian Residents only.