There are good reasons why self-directed super funds (SMSF) have tripled in 20 years. Going the DIY super fund route gives people more control, flexibility, and options than handing over their nuggets to a superannuation fund. It is important to note that there are also a lot of helpful hints and tips on setting up and running an SMSF.
But at the end of the day, the main reason nearly 1.3 million Australians choose SMSF is to put more money back in their pockets.
The same goes for anyone who chooses to manage their own investment property. The only difference is that while the SMSF concept is now well established, an industry supported by technology and professional advisors, awareness of similar processes for professionally creating a Self-Managed Investment Property (SMIP) is only just starting to spread. .
Ultimately, there is no reason why a person willing to put the time and energy into managing their own retirement pension should not do the same with their own real estate investments.
A growing number of homeowners are using emerging technologies and discovering how easy it can be to take control of their real estate assets while saving thousands of dollars in management fees over time.
In light of what we’ve seen with the growth of SMSF, SMIP makes sense. Consider how SMSF skyrocketed once people discovered not only the financial benefits, but also that they could be guided step by step through the process. Figures from the Australian Taxation Office (ATO) show that about a third of Australians now administer their own pension benefits through SMSF, which total nearly $ 750 billion. Between 1999 and June 2020, the number of SMSF increased from 197,000 to 600,000 in June 2020 while their membership increased from 387,000 to 1.125 million during the same period. Currently, the ATO is registering new SMSF at a rate of approximately 20,000 per year.
Real estate investment is also on the rise, especially in recent times: the five years 2013/14 to 2017/18 saw residential real estate investment rise from $ 20 billion to $ 36.2 billion according to ATO statistics. . In fiscal year 2017/18 (latest figures available), the ATO estimated the number of real estate investors in Australia to be around 2.2 million (around 20% of households). Most of these investors (71% or 1.57 million) own investment property. About 20% (418,000) own two investment properties and only 6% own 3.
In short, property management is disrupted by technology. As with the traditional retirement pension, new systems have returned the reins to the riders. The “secrets” of managing your investment property are now available free of charge, as owners are able to professionally carry out all the processes traditionally carried out by their third-party managers.
Managing your own rental property can be daunting at first. But like everything, after a few months of following the step-by-step instructions available on the RentBetter platform, it will become second nature, just as the self-directed retirement pension has been to the million plus Australians who are now managing their own SMSF.
The RentBetter platform explains in a clear and concise way the process of renting a property while reducing the fees to a fraction of the cost of using a traditional property manager.
It does this by giving owners access to the same tools and services that professionals use. Everything is covered, from advertisements on major portals to more delicate tasks such as creating a rental agreement, selecting potential tenants, tracking rent payments, tracking maintenance and expenses and generating year-end reports.
Consider how much you pay a property manager after their costs are added up over 12 months and then multiplied over years. An average investment property rented for $ 500 per week will earn $ 26,000 in annual rent. After a property manager’s fees, GST and commissions are factored in, along with unforeseen charges for things like inspections or rental fees, well over $ 2,000 has gone down that rabbit hole. Calculate this amount paid for the time you own your investment property and it is clear that self-management equates to substantial savings.
Just like the family home and the retirement pension, your real estate investment is one of the biggest financial commitments you will make in your lifetime. It makes sense to maximize the benefits of your hard work and be part of the new generation of self-managed owners.
This article is sponsored content. The provider of this content has a commercial agreement with Switzer Financial Group.