SMSF Investment Loans - a quick primer

SMSF Investment Loans

Setting up your own self managed super-fund to invest in real estate may be a really tax-effective investment strategy for you and your partner. We know that this form of investment is still gaining in popularity, with more & more lenders offering loan products specifically designed for this type of purchase.

As it has its own level of complexity, you need an experienced mortgage professional who can steer you through all the confusing industry jargon & recommend the best & most suitable loan product that meets your needs, goals & objectives.

I am an experienced finance professional who has an accounting background, so I fully understand how SMSF loans work, and which lenders are offering the best SMSF loan products right now.

As an example, did you know?

• You (and your relatives) are never allowed to live in the property you purchase through your SMSF. The property must be for investment purposes, with the sole intention of always being rented out.

• You cannot build a new property using your SMSF. The property you purchase through your SMSF must be an existing, already-established property.

• You cannot borrow further money to renovate or repair your SMSF investment property. Any renovations or repairs must be paid for out of the existing fund, and they must not be classified as ‘improvements’ to the property.

• Not all lenders offer SMSF loans in all states, and territories. In fact, some lenders will not allow SMSF loans in some regional areas. Best to allow me to check first.

• Your personal income & personal debts or expenditure are not taken into account when a lender assesses your ability to repay an SMSF loan. The lender will only look at the balance of the super fund, the expected weekly rent, and your on-going super contributions into the fund. Your super fund becomes the subject of the credit assessment, not you.

• Generally speaking, interest rates & lender fees are slightly higher for SMSF loans than standard ‘regular’ investment home loans.

• Some lenders offer ‘Interest only’ loan repayments, as well as principal & interest loan repayments.  

• Some lenders will go as high as 80% LVR for SMSF purchases.You just need to have at least 20% in your fund for deposit + costs.

There are many more factors to consider when purchasing through your SMSF, and you need a professional like me to help you navigate all the twists & turns when borrowing to do this.

Call me now, or book into my calendly diary for a confidential, no obligation chat.

I look forward to being your SMSF lending expert!  

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