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Benefits of Investing in Mortgage With Your SMSF

Benefits of Investing in Mortgage With Your SMSF

[Disclaimer: the following blog is not financial advice. It’s best to consult your financial advisor before making any decisions]

When it comes to self-managed super funds (SMSF), preparing for the future is all about having the right balance of investments. What a strong SMSF investment strategy looks like will depend on a variety of factors, but it is always wise to invest in tangible assets such as mortgages, offering a fixed income to help make retirement easier.

You should be regularly reviewing and updating your super investment strategy to ensure that it is not only performing well but is also compliant with the law. The wisest investors use these reviews as an opportunity to consider new investment avenues, especially if you are lacking a viable source of predictable income that is less vulnerable to changes in the market and economy.

Choosing the Right Investments For Your SMSF

As the manager of your own super fund and retirement savings, it is crucial to have a variety of investments in different asset classes areas, managing the various levels of risk and keeping your portfolio balanced. 

Each type of investment carries its own risks, such as private credit funds requiring you to hold on your investment for long periods of time and stocks existing in a volatile market. The benefits of private equity can also be alluring when it comes to real estate investments, although it carries the same risk as private credit while also requiring you to be an accredited investor.

If you are looking for SMSF investment options that are accessible and have reduced risk, investing in private debt through mortgages can make an excellent addition to your portfolio.

Private Investment and Mortgages

Because mortgage investments are based on tangible assets that increase in value over time, they are generally safer than investing in the stock market. Whether you’re looking to add to your super investment or start with a solid foundation for your self-managed super fund, choosing to invest in property is a good long-term choice, no matter which way you do so.

Mortgage investments and mortgage funds are two of the most reliable ways to invest in property. Since the debt involved in mortgage investments or funds is secured by property, there is significantly less risk involved should the debt result in a default (depending on the Loan to Value ratio).

For investors looking to further minimise risk, first-mortgage investments are a safer option, with first-mortgage investors being paid out first in the event of a default. Second-mortgage investments tend to be more lucrative, given the higher risk involved. Whether you invest in a first or second mortgages, you receive a steady source of income funds, making it an effective super fund investment strategy.

Some risk-averse investors prefer to choose a contributory mortgage fund, offering a secure and stable investment that has a low chance of default. By putting your money into a group of properties with other investors, you share the risk and the profit, giving yourself a reliable source of income for your next super fund investment.

Arthurmac Helps You Invest For Your Super

As a private investment company with close to over 20 years of success in the mortgage investments sector, Arthurmac has the experience necessary to improve your SMSF strategy. With an investment portfolio that has survived the pandemic and the Global Financial Crisis, we have a proven record of finding the best mortgage investments for our clients.

If you would like more information about mortgage investments or would like to speak to one of Arthurmac’s financial specialists, call us on 1300 417 690 or complete our contact form and we will get back to you as soon.

Disclaimer: Please be advised that it is highly recommended to conduct thorough research and seek guidance from a financial expert prior to making any investment decisions. It is further recommended to regularly review your investment portfolio and make necessary adjustments to ensure it aligns with your financial goals.

Stuart Styles

Managing Director Stuart has 16 years of experience as a Financial Services professional having worked previously in asset finance & management roles within the Motor Industry.