How SMSF Property Shares Work (and Why So Many Australians Start This Way)

31 Dec

Buying a Whole Property Feels Impossible. That’s the Point.

If you’ve ever looked at property prices and thought, “There’s no way I can do that,” you’re not alone.

What many Australians don’t realise is that you don’t need to buy an entire property to be involved in property.

If you have superannuation, you may already have enough to own a share of a residential property and receive rental income from it.

This is done through a structure called Tenants In Common, where a Self-Managed Super Fund (SMSF) can legally own a portion of a property, be listed on the title, and receive its share of the rent.

So What Is a Property Share?

Instead of buying 100% of a property, your SMSF purchases a 5% ownership share.

That share is real, legal ownership. It means:

Your SMSF is on the property title
Your SMSF receives monthly rental income
Your share can increase in value if the property value rises

You’re not buying a “unit” or a “product”. You’re buying a registered interest in real Australian property.

Why This Structure Appeals to SMSF Holders

This model is popular because it removes many of the biggest barriers to entry.

Lower starting point
Participation can begin from around $60,000.
Risk can be spread
Instead of putting all your super into one property, funds can be spread across multiple shares.
Monthly rental income
Rent is paid directly into your SMSF.
Completely hands-off
Tenants, maintenance, and property management are handled by professionals.

No phone calls. No repairs. No chasing rent.

How the Process Works (In Plain English)

Step 1: SMSF setup
If you don’t already have an SMSF, we connect you with specialists who manage the setup and compliance.

Step 2: Choose a property share
Select from properties with strong rental demand and consistent performance.

Step 3: Purchase and registration
Your SMSF buys the share and is officially recorded on the property title.

Step 4: Rent starts flowing
Your share of the rent is paid monthly into your SMSF.

What About Growth and Exiting?

If the property increases in value over time, your share can increase in value as well.

When you decide to exit, your share can be sold either:

On the open market, or
To another Tenants In Common participant

This allows you to unlock your portion of the property’s value.

The Big Takeaway

SMSF property shares offer a way to access real estate without buying an entire property, taking on large debt, or managing tenants yourself.

For many Australians, it’s a practical, lower-barrier way to participate in property using money they already have in super.

Glen Pittock