8 December 2021
1300 794 893
Subscribe
Pexels Image/Ketut Subiyanto

From SMSF to SMIP (Self-Managed Investment Property). The Rise of The Self-Managing Landlord

Jeremy Goldschmidt
17 November 2021

Sponsored Content

There are good reasons why Self-Managed Super Funds (SMSF) have tripled in 20 years. Going down the DIY super fund route gives people greater control, flexibility and options than handing their nest eggs to a superannuation fund. Importantly, there is also plenty of help and how-to-style advice available on setting up and running a SMSF.

But ultimately the number one reason almost 1.3 million Australians choose SMSFs is to put more money back in their pockets.

The same can be said for anyone who chooses to manage their own investment property. The only difference is while the SMSF concept is now well-established, an industry underpinned by technology and professional advisers, awareness of similar processes to professionally create a self-managed investment property (SMIP) is only just starting to spread.

At the end of the day, there is no reason why anyone willing to spend the time and energy managing their own superannuation wouldn’t do the same with their own real estate investments.

A growing number of landlords are using emerging technology and discovering just how straightforward it can be to take control of their real estate assets while saving thousands of dollars of management fees over time.

In light of what we’ve seen with the growth of SMSFs, SMIP is logical. Consider how SMSFs skyrocketed once people discovered not only the financial benefits but also that they could be guided step-by-step through the process. Australian Taxation Office (ATO) figures show about one-third of Australians now manage their own retirement benefits via SMSFs, which total almost $750bn. Between 1999 and June 2020, the number of SMSFs soared from 197,000 to 600,000 in June 2020 as their members swelled from 387,000 to 1.125 million over the same period. Currently, the ATO is registering new SMSFs at a rate of about 20,000 per annum.

Real estate investment is also on the rise, especially in recent times: the five years from 2013/14 to 2017/18 saw residential property investments leap from $20bn to $36.2bn according to ATO statistics. In the 2017/18 tax year (latest figures available) the ATO put the number of property investors in Australia at about 2.2 million (about 20% of households). The bulk of these investors (71% or 1.57 million) own one investment property. About 20% (418,000) own two investment properties, and just 6% own 3.

In short, property management is being disrupted by tech. As with traditional superannuation, new systems have handed the reigns back to riders. The “secrets” of managing your investment property are now freely available, with landlords able to professionally perform the full range of processes traditionally carried out by their third-party managers.

Handling your own rental property can be daunting at first. But like anything, after a few months of following the step-by-step guidance available on the RentBetter Platform, it will become second nature, just as self-managing superannuation has for the million-plus Australians who now run their own SMSFs.

The RentBetter Platform clearly and concisely explains the process of renting out a property while reducing fees to a fraction of the cost of using a traditional property manager.

It does this by providing landlords access to the same tools and services professionals use. Everything is covered, from advertisements on the major portals to trickier tasks such as creating a lease agreement, screening prospective tenants, tracking rental payments, keeping on top of maintenance and expenses, and generating end-of-year reports.

Consider how much you are handing a property manager once their costs are added up over 12 months, then multiplied over years. An average investment property rented out at $500 a week will reap $26,000 in annual rent. After a property manager’s fees, GST and commissions are taken into account, along with unexpected charges for such items as inspections or letting fees, well over $2000 has disappeared down this rabbit hole. Calculate that sum paid for the time you hold your investment property and it is clear that self-management equates to substantial savings.

Like the family home and superannuation, your investment property is one of the biggest financial commitments you will make in a lifetime. It makes sense to maximise the benefits of your hard work and become part of the new breed of self-managed landlords.

This article is sponsored content. The supplier of this content has a commercial arrangement with Switzer Financial Group.


Want to know the 5 Stocks Peter Switzer & Paul Rickard are buying in October?

We're giving you FREE access to find out which stocks our Switzer Report experts think have the highest upside in October and beyond!

Comments
Get the latest financial, business, and political expert commentary delivered to your inbox.

When you sign up, we will never give away or sell or barter or trade your email address.

And you can unsubscribe at any time!
Subscribe
1300 794 893
© 2006-2021 Switzer. All Rights Reserved. Australian Financial Services Licence Number 286531. 
homeshopping-cartphoneenvelopedollargraduation-cap linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram