Self-managed superannuation investors face financial ruin when adding real estate to their portfolios, according to residential property research firm Braxton Chase.
This comes in the wake of new Commonwealth retirement planning rules, which enable self-managed super investors to borrow money and leverage assets such as property.
While this presents tremendous wealth-creating opportunities, Braxton Chase CEO Andrew Donnelly stressed that they are fraught with danger for inexperienced investors.
“There has long been an abundance of good information out there for superannuation planners wanting solid advice on share investments, but not so on residential property investments,” he said.
“It’s truly staggering how residential property investors continue to fall under the spell of spruikers, scammers, unscrupulous real estate agents, emotions, rumours and ‘hot-tips’ on easy fortunes.
“Falling victim to any of these when mixing real estate investment with super planning is a sure way to create cracks in retirement nest eggs. It only takes one bad property investment decision to sink an otherwise good retirement savings plan”, Donnelly continued.
“Relentless research and rigour must accompany all real estate investment decisions in exactly the same way that it accompanies share investing.
“That means treating property as a financial product – placing it under cold, hard, ruthless scrutiny to be sure it has all the key attributes to deliver good long-term yield and growth.”
“It’s important for DIY super fund operators to be sure that investing in property dovetails with their existing retirement planning strategy”, Donnelly added.
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