As the trend of self-managed superannuation funds (SMSF) gains momentum, many are seizing the opportunity to take charge of their investment decisions. Particularly, SMSF lending has emerged as a popular choice, offering significant control and flexibility. Here’s why:
* AVAILABLE LENDING OPTIONS :
See below for details on SMSF Construction and SMSF NDIS
Residential Lending
- Up to 80% loan-to-value ratio.Commercial Lending: Up to 70% loan-to-value ratio.
- Pre-Approval Options: Some lenders offer pre-approval even before the SMSF is legally set up.
- Servicing the Loan: Most loans are serviced independently, relying solely on the income and expenses within the SMSF.
- Additional Considerations:
Personal Financials
In cases where the SMSF loan does not service, personal financials can be used to demonstrate additional repayment capacity. NDIS Property Investing: High returns make NDIS property investing attractive, either as part of SMSF or as a separate investment.
* WHY CHOOSE SMSF for PROPERTY INVESTMENT?
Control & Flexibility
- Tailor your investment strategy to personal goals and risk tolerance.
- Diversification: Spread risks by adding real estate to your investment portfolio.
- Potential High Returns: Capital growth and rental income offer substantial returns.
- Tax Benefits: Enjoy lower tax rates on capital gains and rental income.Asset Protection: Secure your assets from bankruptcy or legal proceedings.Estate Planning: Manage and transfer property effectively within your succession plan.
- Leverage Opportunities: Borrow under specific conditions for larger investments.
SMSF & Construction – Yes you can!
Its generally well known you can’t do a 2 part contract to buy a property – that is a contract for the land and a contract for the build – also called off the plan – But you can.
So it’s not a purchase done directly from the SMSF fund till the build is complete and ready for occupancy – but you can achieve via SMSF. Its a little technical and we need to involve your accountant or financial planner (or one can be recommended) – but you need approx. 1/3 of the purchase price in your SMSF (or super and and SMSDF is being setup – or extra funds can be made) and this accounts for the initial land purchase – the build and the payment of the interest before the SMSF fund officially buys the property.
NDIS
NDIS property can be bought with one contract by an SMSF and a few lenders allow for full valuation and full NDIS/SDA rent and rebates (significant income) – while they can also be done as a construction loan as per above.
Conclusion – if you are considering property to be bought by your super (via SMSF) – lets chat before you get too far.
However, it’s crucial to be aware of the risks and complexities involved, such as strict legal compliance, potential liquidity issues, and property management responsibilities.
Interested in SMSF Investment? Let’s Connect!