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Considering Property Investment Through Your Superannuation?
Thinking about leveraging your superannuation for property investment? An SMSF (Self-Managed Super Fund) loan could be your key to achieving your retirement goals. SMSF loans allow you to use your superannuation to invest in property, potentially enhancing your retirement portfolio. Here’s what you need to know to get started.
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Getting Started with SMSF Property Investment
Investing in property through your SMSF requires careful planning. It’s essential to consult with a lending specialist who has extensive experience in SMSF loans.
Our team of experts are highly experienced in establishing lending for property portfolios through SMSF’s. We understand the pitfalls and challenges when establishing an SMSF and we work closely with your team to ensure everything happens in the correct order and at the right time.
Why would I want to invest in property through an SMSF?
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If you’re a business owner, you could lease your SMSF-purchased commercial property back to your own business, creating a dual benefit.
Only the property purchased with an SMSF loan is used as security, safeguarding your other SMSF assets.
Investing in property through an SMSF comes with specific usage restrictions. Additionally, each lender may have unique conditions and requirements for their SMSF loans.
Starting your journey with a Your Loan Store Finnance and Mortgage Broker can help you understand the next steps and navigate the complexities of SMSF property investments.
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Who is eligible for a SMSF loan?
We assist SMSF borrowers looking to:
Purchase commercial property for their business.
Refinance their existing SMSF loan.
Invest in property to generate retirement wealth.
Properties we can help finance
Residential Investment:
Single title properties.
Commercial Properties:
Office, Industrial, Retail.
Special Properties: Boarding houses or rooming houses
(single title).
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Key Features of SMSF Loans
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80% for Residential, 75% for Commercial properties.
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Up to $4M for both Residential and Commercial.
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Up to 30 years, with Interest Only available for up to 5 years.
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Available to Corporate Trustees only.
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Lenders vary widely in what is required here. We can offer you advice depending on your individual situation
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Rental income from investment property can be used to help with servicing the loan.
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We have a range of lenders that will allow us to refinance your existing SMSF loan to get a better interest rate helping you to reduce the overall costs of investing in property through your SMSF.
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Do I have to have funds remaining in my SMSF after the purchase of a property? In some cases you will and some cases you may not. We can help find the lender to suit your particular set of circumstances.
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The ATO will require you to have ‘’non-arm’s length lease agreements’’ for commercial property purchases.
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Want to make top-up contributions? Some lenders do allow for servicing the loan where contributions are above the compulsory amount and are affordable and from recurring income streams.
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Want to make top-up contributions? Some lenders do allow for servicing the loan where contributions are above the compulsory amount and are affordable and from recurring income streams.
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Borrowing within an SMSF involves strict conditions known as a ‘limited recourse borrowing arrangement’ (LRBA). Your Financial planner will help you to ensure your investing in property aligns with your SMSF’s investment strategy and risk profile. We can help you to find a Financial Planner that has the right expertise in the SMSF’s if you need one.
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SMSF Property Costs
Be aware of all fees and charges involved in SMSF property sales, including:
Upfront fees
Legal fees
Advice fees
Stamp duty
Ongoing property management fees
Bank fees and loan costs
Refinancing Options
Some lenders offer refinancing options for SMSF loans, which can be beneficial if your financial needs change or if you face repayment challenges.
Why Consult a Specialist like us?
Having the right team of experts to support you is crucial. We have access to a highly experienced team that will assist you to put all the building blocks ion place at the right time to ensure your Property Investment is set-up correctly and is complaint with ATO regulations. SMSF loans can be complex due to Australian superannuation and taxation laws. You need an existing SMSF, and it’s recommended to seek independent financial, legal, and tax advice before applying.
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Deposit Requirements
Learn about the initial deposit needed. Lenders vary in their requirements depending on the type of property you are purchasing, the location of the property and the funds currently available in your SMSF
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Loan Costs
Understand all associated costs and will help you cover these costs through you SMSF funds so you don’t have to fund these costs directly out of your own pocket.
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Documentation
We can help you to ensure all necessary documents, like trust deeds, are established through your accountant. There is a lot to do here and our team of brokers will liaise closely with you Accountant meaning you won’t have to!
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We provide our expert services free of charge to you. We are paid to assist you by the lender your loan is with. They all compensate us pretty much the same, meaning we free to be your advocate all the way through the process and will ensure you are getting the best loan available in the market. The only lender preference we have is the one that gives you the best deal!