As a senior inspector of mechanical engineering at the NSW Department of Industry, Peter Sunol was working hard to build his retirement nest egg.
But he was consistently being let down by dwindling returns in his super fund.
Then in 2011, he received the statement that finally prompted his move to self-managed super.
My returns were still going backwards, and I thought, ‘There must be a better way to manage my super than this.’ So, I started to look at other options.
One of the options that particularly appealed to Peter was property investment, and a well-timed opportunity sparked his interest.
“At the same time I received that super statement, there was a real estate pamphlet in my letterbox about a unit for sale in town,” he explains.
“I went and had a look at the unit pretty quickly – it seemed like a good buy in a good spot.”
In terms of a stable long-term investment option, those numbers made much more sense than the superannuation losses Peter had experienced through his employer fund.
But he soon discovered the costs of using his current superannuation savings to buy the property would prove prohibitive.
“I thought I’d be better off pulling $100,000 out of my super account to buy that unit, so I rang my accountant to see if we could make it happen,” he says.
“However, the costs were quite expensive, so I started doing some research on the net and came across ESUPERFUND.”
That unit had a permanent tenancy with a three per cent increase every year.
Shifting to self-managed super
Through ESUPERFUND, Peter learned about the benefits of switching to a self-managed super fund (SMSF).
He was particularly pleased to discover the cost benefits of purchasing property through such a fund.
“I worked out the numbers and the income from the rent would pay the mortgage interest – so the SMSF would pay for itself. But a lot of things had to happen at once if
I was going to make it happen – I had to set up my SMSF with ESUPERFUND, transfer all the money from my current super fund,
set up my trust account and get the loans done, and at the same time keep the vendor happy that I was still going to buy the property.”
But Peter was pleasantly surprised to find the process of setting up his SMSF with ESUPERFUND was simple, smooth and fast.
I put in an application with ESUPERFUND to get things rolling, and within a couple of days I made an offer on the unit.
From my perspective it was no hassle at all – you’re told what to do and how to do it.
Flexibility for every stage
Peter’s property investment has sent his retirement savings back into the positive, and he’s confident that the investment will continue to perform strongly as he gets closer to retirement.
“I’ve got another 20 years to work, so when I’m ready to retire the unit will be fully paid off, and I will have turned an initial $100,000 deposit into whatever the value of that property will be in 20 years’ time,” he says.
He also says that while the low-maintenance nature of property investment suits his current stage of life, he plans to become more active in the share market when the time is right.
“While I’m busy, property investment is a time saver. I’ve done a little bit of trading with shares, but it takes longer to manage.
When I have more time to monitor it properly, I’ll trade a fair bit, but until then it’s all set up for me, so I can still jump on if I get a tip –
all I have to do is log in and trade.
And in the meantime I have a secure income coming in from the property. You can’t do better than that.”