What to know about SMSFs and property

“It’s not hard,” Mr Yee told host Phil Tarrant.

“[However] when you have a self-managed super fund, there are a lot of rules surrounding it. A self-managed super fund is actually the vehicle, a tax vehicle. It can invest in property and all sorts of things, like shares as well. It’s just a vehicle, but there are a lot of rules involved, so if you stick to the rules, it’s not hard at all.”

There are other certain considerations when exploring an SMSF, Mr Yee noted.

“The people that invest in self-managed super funds or use a self-managed super fund need to have the motivation; they need to decide that they want control over their retirement investments and they need to have that controlled flexibility,” he explained.

“They need to [ensure they understand] all the rules and compliance that you have with self-managed super funds; they need to prepare to buy into that, so it’s not for everyone.

“If you’re setting up a self-managed super fund and you just leave it there, don’t worry about it and just have it in cash, then you’re not doing yourself any favours. They are not the people that should have a self-managed super fund … You really have to have that motivation where you really want to do it yourself and control your retirement by having that vehicle … so if you’re motivated to do it, then self-managed super fund is for you.”

Provided investors instil this level of motivation, there are “really no set parameters” in determining whether the time is right for them to consider setting up a SMSF, according to Mr Yee.

“There are no set parameters, but normally it is a matter of people starting to think about their retirement and doing more with it when they’ve paid off their mortgage, [when they’re] paying off the school fees and they’re in the latter stages of their working lives, and they start to save for retirement.

“There’s also no [real] set amount. You’re restricted by the amount you can put into self-managed superannuation general by contribution caps and restrictions, but there’s no set limit.”