Breaking barriers: How a single mother leveraged her super to invest in property

With two young kids aged three and eight at the time, Julie went from owner-occupier to renter once again.

At that time, her kids were her priority, and she thought she would never be able to afford her own property ever again.

“I wasn’t in a position to be able to buy another home to live in in the area that I was, so I went back to renting, and the priority was to look after the kids and get them sorted.”

“While we made money from the property sale, we didn’t make a lot, and it wasn’t enough for a deposit to buy something straight away,” she said.

While money was one part of the equation for becoming an investor, Julie’s new status as a single mother was also a mental obstacle to owning property once more.

“I was nervous about getting into the property market alone, having two young kids. Would I be able to afford it, and what happens if something goes wrong?”

It was only years later, in 2024, that Julie became an investor again.

While going on the owner-occupier path wasn’t on the cards for her, she learnt more about buying a property through superannuation.

“I was hearing more and more about people purchasing through superannuation, and thought that maybe that’s an option for me to have an investment in my own name,” Julie said.

“I had been working for a while, and my super had built up to quite a balance of over $200,000, which made me realise that I had enough funds to buy a property and build assets that way.”

Julie said that, while she couldn’t buy a house to live in the area she liked, she could still secure property in another state and become a landlord.

After talking with a broker, Julie set up an SMSF and, in January 2024, with the help of a buyer’s agent, bought a two-bedroom, two-bathroom unit in Mandurah, Western Australia, for $320,000.

She said that while it can seem daunting, setting up an account was relatively easy and made her buying journey easier.

“It’s a little bit expensive and costs $3,000 to set up, but it is relatively straightforward,” she said.

“You can convert your super into an SMSF, which gives you control over how your super is invested, and you can use the funds as a deposit to buy property, with rental income and employer contributions used to repay the property’s loan.”

Despite having enough money in her super fund, Julie was still hesitant to purchase as a single mother.

“As a single mum, you are always cautious, because you are doing it on your own and you don’t have anyone else to fall back on if something goes wrong. There is no safety net.

“What will happen if there were no tenants in the property and I had to cover all the rent, or if something happened with my employment?”

“Overcoming these doubts was probably the biggest hurdle,” Julie said.

She said that she overcame that stress and doubt by buying a property in a high capital gain area, with a rent high enough to cover her expenses.

“There is no need to make voluntary contributions, and the rental income covers the mortgage cost.

“I actually don’t have to put in any money out of my pocket every week, and my employer’s contributions go directly to my retirement account.”

“That’s been a good piece of mind,” she said.

In Australia, according to the latest ABS data, in June 2024, there were 1.2 million one-parent families, making up 16 per cent of all families across the country.

Of all single-family units nationwide, 741,000 or 62 per cent have dependants, including children under 15, with the vast majority, 78 per cent, led by single mothers.

While single mothers can go down the SMSF route, nationwide, single-parent families can also access the Family Home Guarantee, which allows them to purchase a home with a 2 per cent deposit without paying LMI.

In 2024–25, the Australian government will offer 5,000 Family Home Guarantees, covering up to 18 per cent of a home loan, to help eligible single parents and legal guardians with dependants enter the property market with a smaller deposit.

Eligibility for the scheme depends on the individual’s ability to service the loan, an income under $125,000, and no property ownership in Australia at the time of the loan agreement.

As the scheme is only available for a limited number of single-parent families, Julie encourages single mothers to also look at their superfund and see if they qualify for an investment property.

“Even if they don’t have enough money for a deposit, superannuation can be the option if they have been working for a while; they’ve probably built up quite a lot of funds,” she said.

“My advice is to review their super balance and consult a broker to assess whether investing in property is financially viable based on their funds and income.

“Rentvesting can be a good option.”

While Julie is still renting in her area of choice, she is now thinking about growing her portfolio further and buying another property in another year or two, once she has more funds in her SMSF.

She is also considering helping her eldest son start his own property journey.

“We’re also considering buying a property together with 22-year-old son, who just finished uni, to get him onto the property ladder.

“This would be outside of super, easing my financial burden. The idea is to invest together, allowing him to gain equity in the property for future purchases or to build a portfolio that we can grow together.”

While Julie continues her path as an investor, she encourages other single women to explore their financial options, as many who have been through a divorce or have children, have more equity in their super than they realise.

“Don’t think there are no options just because you’re a single mother and you feel like you’ve missed that opportunity.

“Don’t think that just because you may have had a house and lost it in a divorce, that you’re never going to have that opportunity to be in the property market again.”

“Everything is possible,” she concluded.

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