Despite the increase in popularity of holding property investments among SMSF trustees, the practice comes with an element of danger, according to HLB Mann Judd. 

Information released in the most recent Mutiport SMSF portfolio analysis recorded a marginal rise in property holdings, attributed to the clarification of the limited recourse borrowing rules by the Australian Taxation Office in September 2011.

"It's not a bad idea if you are a business owner and you're buying a property to draw on the business and then leasing it out," said superannuation director Andrew Yee.

"It does get more risky if you're just buying a property in your funds and then having one big lump asset in the sum."

The issue is where the super balance is geared into property and the capital used to launch the SMSF.

"The biggest risk with property is the serviceability of the loan, which comes down to the property being rented out - so what happens if you've got your money in your super fund in property and then you go through a period when you can't rent the property out," said wealth management partner Jonathan Philpot.

"It's not like you've got the spare money that you can them just put in to pay off the loan - this is all money that's got to come out of superannuation so you might fall short of being able to repay the loan if there's no other cash or investments able to repay that loan in the super fund"

The concessional contributions cap of $25,000 is additionally a cause for concern in the advent of insufficient income to service the loan, said Philpot.

"We encourage people with SMSFs to take out the comprehensive life insurance…though again with this $25,000 limit, by the time you put in enough to cover the insurance premiums, there's often not a huge amount left over to add to your investment," Philpot said.