A self managed super fund has become a very much talked about subject today and it’s quite understandable. There is a lot in which you can do with self managed super funds and it may be something that interests you too. Investing in property is quite an amazing feat. You don’t always get the opportunity to invest in commercial or residential property but with a SMSF it opens the door to a whole new world of possibility. You might not give too much thought over investing in property with self managed super funds but it can be an avenue to explore. However, do you know what is OK to invest in and what isn’t?
Restoring a Damaged Kitchen Due To Fire
Self managed superannuation fund is a great little investor and you can do a lot with it. Let’s say you purchased a home that has sustained damage via a fire, you would be able to invest the money from the fund to repair the home. You can restore the kitchen to how it was before so that the walls were strong and new, the countertops were fresh and ceiling was once again whole.
You Cannot Add an Extension Whilst Restoring the Home
Unfortunately most people seem to think since the home has been damaged by fire it gives them the freedom to go ahead and do whatever they like but that isn’t the case. When a home or a kitchen has been damaged by fire, the money from a self managed super fund can be invested in the property but only to restore the kitchen. The money cannot be used to add a new extension onto the home. You might think you can since you’re already restoring the kitchen but unfortunately you can’t.
Making General Improvements to the Home Is Approved
If you wanted to, the money from your super fund could be put towards simply things such as keeping the home livable. The home could be painted with money from the self managed super fund; and it could also be fitted with new fire and smoke detectors. The home could even install new fences and guttering. If the roof has become damaged, that too can be replaced or repaired if necessary.
Installing Luxury Fittings
Now, a lot of people have tried to invest their money into things such as swimming pools (outdoors and in) as well as automation security systems and even adding a second bathroom but unfortunately this isn’t allowed. After reading this you should also visit this link:https://smsfcoach.com.au/2013/04/11/smsf-borrowing-what-can-i-do-with-an-investment-property-within-the-rules/ here to know more. A self managed superannuation fund cannot be used to install any so-called luxury items. While it would be useful to add a swimming pool to increase the value of the home, it isn’t allowed under the super fund investment rules.
SMSF borrowing can be quite a challenge at times especially if you aren’t familiar with the borrowing rules. However investing in property can be an amazing opportunity; don’t ruin it by not knowing what is OK to invest with and what isn’t. If you want to know more, check out smsfselfmanagedsuperfund.com.au.