Investing in property through a highly leveraged strategy can be an effective way to boost and expedite the growth of your retirement savings. One key advantage is the use of an SMSF (Self Managed Super Fund) loan, which plays a strategic role in your investment portfolio.

SMSFs are permitted to take out loans to purchase both residential and commercial investment properties, with the property being held in a trust until the loan is fully repaid.

For those who manage their own super funds or are considering setting one up, a well-structured SMSF loan can enable your fund to acquire real estate assets for capital appreciation and income generation.

These loans are also referred to as Limited Recourse Borrowing Arrangements (LRBAs). In an LRBA, the loan is secured by the property alone, protecting other assets within the super fund from being affected in case of a loan default.

The loan’s serviceability can be assessed based on the rental income generated by the property, alongside contributions from members and returns from other investments within the fund.

Typically, SMSF loans require personal guarantees from the fund members and an affirmation from the SMSF trustee that the loan aligns with the fund’s investment strategy.

Our team can help with:

• Expert Guidance: A mortgage broker can provide expert advice on the complex regulations and requirements associated with SMSF borrowing, ensuring that the customer understands their obligations and options.
• Access to Specialised Lenders: They can connect the customer with specialised lenders who offer SMSF loans, which may not be readily available through traditional banks, thereby expanding the customer’s borrowing options.
• Tailored Loan Solutions: Mortgage brokers can assist in finding and negotiating tailored loan solutions that best fit the customer’s financial situation and SMSF strategy, potentially securing more favourable terms and rates.