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The Number 1 Mistake People Make When Buying in their SMSF - featured image
By Brett Warren

The Number 1 Mistake People Make When Buying in their SMSF

Are you considering buying a property in your Self Managed Superannuation Fund?

2 Smsf ErrorsIt has become more and more popular over the last decade as people opt to take control of their financial future.

I must firstly state that if you are considering exactly this, it is important to get advice from an appropriately licenced advisor first.

This area continues to become heavily regulated and I see that as a real positive as real estate agents and property marketers have “advised” some of their clients poorly in the past

Interestingly at Metropole we are certainly noticing more clients considering this option around our offices in Melbourne, Sydney and Brisbane.

They are the smart ones!

Unfortunately, the majority get this one thing wrong when it comes to buying the property.

Here is the number one mistake we see;

The Number 1 Mistake People make when Buying in their SMSF

Buying Brand New or Off the Plan

This is definitely the biggest mistake I see people making.

Sure , there looks like there could be benefits in buying new or off the plan properties;

  • Brand new
  • Warranties
  • Builders Warranty
  • Depreciation

However, these should be secondary considerations.

Quite often, these types of properties come with hidden cost such as project marketing, advertising fees, sales commission and kickbacks.

Prices can be inflated anywhere from 5-20% and this will immediately outweigh any benefits you would have otherwise seen.

On top of that, they also often have exorbitant Body Corporate fees to cover things like pools, spas, saunas, gyms, roof top cinemas etc etc.

Perhaps, the worst part of this is that you are paying for something you will never even get to use!

Many investors are sucked into towers of 100, 200 plus apartment complexes where land values are almost non-existent and growth is very subdued at best.

Brand New

While I would not rule out buying off the plan altogether, I would buy brand new under the right circumstances.

Pension FundAs long as you can remove the “middle man”, cut out the commissions, and kickbacks, you will still get some of the other benefits.

We have a lot of success for our clients with this strategy as we can approach the agents etc direct without you paying for glossy brochures or champagne-laced seminars.

Unfortunately, for the average person this may be unachievable.

I would also be looking for something with a considerable land value, ideally a house or townhouse or an apartment in a smaller boutique complex and without all the bells and whistles, so my outgoings are lower.

Importantly, the same property fundamentals when buying outside of Super must come first.

There is also another strategy that many others overlook…

FACT: You can still buy established property in your Self-Managed Super Fund.

Established Property

Many investors often overlook this type of property, as it does not have some of the perceived benefits of buying brand new.

Established PropertyBuying an established property may often be a superior alternative.

Particularly in terms of buying an Asset with high capital growth,  which should be a priority.

The overall growth in this asset over the next 10- 20 years will often beat the smaller up front benefits by a considerable distance once you take into consideration compounding and superior growth.

By buying in a second hand market, you may also avoid paying a premium with “built in” commissions, but still have warranties left over.

A 2, 3 or even 5 year old property, should also still be in excellent condition and therefor reducing maintenance costs.


The first step in considering using your Super to invest in property is to speak with a licenced professional.

Retire ConsultJust as critical though is asset selection.

The biggest mistake people make is buying off the plan or choosing new properties that are not investment grade.

While buying off the plan should be considered a “no-no”, buying new, can have its benefits when done correctly.

In many cases, an established property should also be a consideration, as it is more likely to be investment grade and give you the superior capital growth, minus the inflated prices and higher ongoing costs.

If this all sounds too confusing, why not engage a team of professionals to do all the hard work for you.

At Metropole, we have the licenced professionals to assist with setting up a Self-Managed Super Fund and the best minds in Australia to help you find the best investment grade asset.

We are just a click or a phone call away!

If you're looking at buying your next home or investment property here's 3 ways we can help you:

Sure our property markets are improving, but correct property selection is even more important than ever, as only selected sectors of the market are likely to outperform.

Why not get the independent team of property strategists and buyers' agents at Metropole to help level the playing field for you?

We help our clients grow, protect and pass on their wealth through a range of services including:

  1. Strategic property advice. - Allow us to build a Strategic Property Plan for you and your family.  Planning is bringing the future into the present so you can do something about it now! Click here to learn more
  2. Buyer's agency - As Australia's most trusted buyers’ agents we've been involved in over $3Billion worth of transactions creating wealth for our clients and we can do the same for you. Our on the ground teams in Melbourne, Sydney and Brisbane bring you years of experience and perspective - that's something money just can't buy. We'll help you find your next home or an investment grade property.  Click here to learn how we can help you.

Wealth Advisory - We can provide you with strategic tailored financial planning and wealth advice. Click here to learn more about we can help you.

About Brett Warren Brett Warren is National Director of Metropole Properties and uses his two decades of property investment experience to advise clients how to grow, protect and pass on their wealth through strategic property advice.
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