We can help you use the money in your Self-Managed Superannuation Fund to buy residential and commercial property
SMSF loans are used to access the capital held within your superannuation fund to purchase a residential or commercial property.
Self Managed Super Fund lending is a relatively new and complex area of finance. Buying property this way enables you to use capital tied up in your personal Super Fund. Your Super Fund is the owner of the property. If you have a business, the business can rent from your Super Fund. This secures tenancy for the property and relieves the vulnerability of the business as renters. You are effectively your own land lord.
It is critical that the loan is established in the strict framework of Superannuation Law. It is often necessary to consult with your accountant, financial planner and solicitor to ensure all is correct and tax effective at the same time.
As Grant is a Chartered Accountant he is well equipped to handle transactions of this nature.
Joan wanted a wealth building plan to help her set aside funds for a large nest egg for retirement. She had a SMSF with $200,000 and used the money to borrow extra funds to secure a residential investment property. Using a variable rate loan with a 7.80%p.a. interest rate, Joan borrowed $300,000 with an LVR of 80 per cent. The deposit is partly covered by some of Joan's SMSF funds, while the balance is borrowed money.
This allowed her to buy a property for $475,000, bringing the total cost, including stamp duty and other fees, to $500,000. Joan then rented the property out at $500 per week, giving her an annual rental stream of $26,000. Using money earned from the rent and other income, Joan was able to meet her home loan repayments and used SMSF money to cover repairs to the property.
Keeping an eye on market rates, Joan can increase the rent of her property while it grows in value over time. As a result, Joan can earn a steady stream of rental income and re-sell the property in the future potentially for a higher amount.
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