Too often property investors haven’t done their homework before they buy, according to Wealth Know How’s General Manager Fiona Parker.

“You have to know the compliance rules particularly if you are making a property investment for your SMSF,” said Ms Parker. “And our videos are designed to help you understand your options.”

“Being able to demonstrate you’ve ‘done your homework’ before buying is just one of the many issues which we explore in our most recent financial investment video on property investment,” says Ms Parker.

“If you want to make property an asset in your SMSF investment strategy it is possible to buy most kinds of established property, providing the purchase is made at arm’s length.”

Parker said common residential property investment choices such as houses and apartments are popular but it is important to comply with the strict rules when buying property for a SMSF.

You are allowed to buy off-the-plan, for example, but you cannot buy vacant land and then build a house.

“It is important to remember that if you’re borrowing, there can be no alterations that change the character of the property until the SMSF property loan is paid off.”

“It’s safest to stick with residential properties that are ready to rent, as these can be justified as investments that will meet the investment objectives of a SMSF,” said Parker.

“Some might find it safer and best to use a licensed advisor to assist so you can demonstrate that your fund has conducted the prudential research into the property that is required before buying.

Parker said that the three important attributes to think about are location, yield and maintenance needs.

“Ideally, you should look for a reasonably new property, in a good location, with a healthy rental market and a diverse employment mix, which will help you attract a high quality of tenant,” she said.

“The property should also have strong long-term capital growth prospects and a relatively high rental return.