Self-Managed Super Funds Loans
Investing in property through a Self-Managed Super Fund (SMSF) is an excellent way to enhance your retirement savings and diversify your investment portfolio.
With an SMSF loan, you can borrow money within your super fund to purchase residential or commercial property, which the fund will own and manage. Understanding the regulations and compliance requirements is crucial to making the most of this opportunity while staying within legal guidelines.
That’s where we come in! We specialise in helping clients secure SMSF loans and provide expert guidance throughout the process. Some of us on the team have investment properties in our own SMSFs, so we can offer advice from personal experience.
We’ll help you navigate the complexities of SMSF borrowing, from understanding the necessary trusts (SMSF Trust and Bare Trust) and eligibility criteria to selecting the right lender and loan structure for your needs. We can also connect you with the professionals who set up our personal SMSFs, assist with rollover forms, and set up an SMSF bank account.
We’ll also give you some guidance on the type of property to buy, for example, it’s recommended to purchase positively geared properties only as you don’t have any negative gearing benefits when buying a property in your SMSF, and you don’t want any shortfall eating away at your superannuation funds. Sounds like a lot to think about, but we’ll be with you every step of the way.
Why Consider an SMSF Loan?
- Investment Growth: Property purchased through an SMSF can benefit from capital growth, potentially increasing the value of your retirement fund.
- Steady Income Stream: Rental income from SMSF property can provide a consistent income stream, bolstering your retirement savings.
- Risk Management: Property can be a less volatile investment compared to stocks, offering a balance in your overall investment strategy.
- Asset Variety: Including property in your SMSF allows for a mix of asset types, reducing the risk associated with having a single asset class.
- Borrowing Power: If you have hit a servicing wall, and are unable to buy another property due to your borrowing capacity not being enough, buying within a SMSF might be the way to attain the next Investment Property.
- Benefit: SMSF loan servicability ignores any other properties and mortgages you may hold personally. For example, if you have 10 properties owned in your own name (or even in trust structures) outside of super, the SMSF loan servicability requirements ignore all assets and liabilities held outside of super, including ignoring your personal living expenses.
- Concessional Tax Rates: Rental income and capital gains from the property may be taxed at a concessional rate within the SMSF, which can be significantly lower than personal tax rates.
- Tax-Deferred Growth: Earnings on investments within the SMSF are generally taxed at a lower rate, allowing more funds to be reinvested for growth.
- Direct Investment Decisions: An SMSF gives you the control to make direct investment decisions about the property, including tenant selection and lease terms.
- Customised Investment Strategy: You have the flexibility to tailor your investment strategy to your financial goals and risk tolerance, making adjustments as needed.
The SMSF Loan Application Process
- Establish Your SMSF: If you haven’t already, we assist in setting up your SMSF, ensuring it is compliant with Australian Superannuation laws.
- Investment Strategy: Your fund needs an investment strategy that includes the rationale for holding property, which we help develop.
- Eligibility Check: We review your SMSF’s structure, financial health, and compliance to ensure it meets lender criteria for loan eligibility.
- Pre-Approval Process: Obtaining pre-approval gives you a clear idea of your borrowing limits and strengthens your position when bidding on properties.
- Identifying Suitable Properties: We help identify properties that meet both your investment criteria and the legal requirements applicable to SMSF property investments.
- Due Diligence: Ensuring the property is a sound investment and meets all regulatory requirements is crucial, which we facilitate.
- Application Submission: We guide you through compiling and submitting the necessary documentation required by lenders for an SMSF loan.
- Negotiation with Lenders: We negotiate terms with lenders to secure the most favourable loan conditions for your SMSF.
- Finalising the Purchase: We ensure all legal and financial aspects of the property purchase are managed correctly, aligning with SMSF regulations.
- Ongoing Management: Post-purchase, we can assist with the ongoing management of the property within your SMSF, ensuring compliance and optimal performance.
What to Expect from Your MTM Mortgage Broker
- Expert Guidance: Our brokers are well-versed in the complexities of SMSF loans and property investment, equipped to guide you through each step. This includes understanding legal requirements, compliance issues, and the best strategies for leveraging your SMSF.
- In-Depth Analysis: We provide detailed analysis and insights into the property market, helping you make informed decisions that align with your SMSF investment goals.
- Customised Strategies: We provide custom advice that respects the unique aspects of your superannuation goals and financial situation. This ensures that your investment plan is tailored to your specific needs and risk tolerance.
- Holistic Planning: Our approach considers your entire financial picture, ensuring that your SMSF investments complement your overall retirement strategy and long-term financial objectives.
- Clarity and Simplicity: Expect clarity about each phase of the loan application and property investment process, with all your questions answered in simple, understandable terms. We aim to demystify the process, making it accessible and straightforward.
- Regular Updates: We keep you informed with regular updates and progress reports, ensuring you are always aware of the status of your loan application and investment.
- Comprehensive Assistance: From setup to purchase to ongoing management, we are here to support and advocate for your SMSF’s best interests. Our support extends beyond the initial loan approval, assisting you with any challenges that arise during the life of your investment.
- Personalised Service: You will receive personalised attention from our dedicated team, who are committed to ensuring your SMSF property investment is successful and meets your financial goals.
Investing in property through your SMSF can significantly enhance your retirement strategy, offering both financial growth and tax benefits. With our expertise in SMSF loans, we ensure that your journey into property investment is informed, compliant, and aligned with your retirement objectives.
Call us or make an appointment with us today to discuss how we can support your SMSF property investment plans!
