The Meteoric Rise of SMSF Leading to an Increase in Self-Managed Investment Property Owners

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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.

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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.

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The only difference is while the SMSF concept is now well-established, an industry underpinned by technology and professional advisors, awareness of similar processes to professionally create a self-managed investment property (SMIP) is only just starting to spread.

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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.

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So how do I go about it?

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Simply by logging on to your home computer or device and following the guidance of a digital investment property management platform. This easy-to-follow system effectively places you in the shoes of your property manager by handing over the ability to execute every aspect of their role.

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A growing number of landlords are using the emerging technology and discovering how straight forward 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.

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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 $750 billion.

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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.

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Currently the ATO is registering new SMSFs at a rate of around 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 $20 billion to $36.2 billion according to ATO statistics. In the 2017/18 tax year (latest figures available) the ATO put the number of property investors in Australia at around 2.2 million (about 20 per cent of households).

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The bulk of these investors (71 per cent or 1.57 million) own one investment property. About 20 per cent (418,000) own two investment properties, and just 6 per cent own 3.

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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.

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How can RentBetter help?

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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.

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The RentBetter Platform clearly and concisely explains each requirement of renting out a property while slashing management fees to a fraction of the sums paid to outside managers. It does this by providing landlords access to the same tools and services professionals use.

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Everything is covered, from how to craft advertisements and place them on the major portals to trickier tasks such as creating a lease, screening prospective tenants, tracking rental payments, keeping on top of maintenance and expenses, and generating end-of-year reports.

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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.

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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.

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Like the family home and superannuation, your investment property is one of the biggest financial commitments you will make in a lifetime.

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It makes sense to maximise the benefits of your hard work and become part of the new breed of self-managed landlords!