Self Managed Super Funds

With the right financial services and the ideal strategy, you can get more from your Self Managed Super Fund.

Self Managed Super Funds — SMSFs — provide Australians with an effective means of not only saving for retirement but also actively growing their income for the future.

At Sydney Brokers, we specialise in SMSF lending and refinancing to help you do just that. Reach out to our team to get started, or read on to discover more about how you can optimise your SMSF strategy.

    How Do Self Managed Super Funds Work?

    A self managed super fund is a kind of superannuation fund, which means you can use it to set aside money you will later use to support yourself and your family during retirement. With an SMSF, you will be managing this fund yourself, adding money to the fund as you see fit and taking care of the fund’s investments and insurance. This is the key point of difference between an SMSF and a retail or industry super fund.

    Anyone can set up an SMSF, but the responsibilities and duties of operating the fund mean it is not suitable for everyone. Working with a financial planner or accountant can help you understand if this is the best decision for your situation.

    From 2007 onwards, SMSF managers have been permitted to take out loans registered to the super fund, making it easier to purchase assets and grow the value of the fund. These self managed super fund loans are only provided if strict rules and regulations are adhered to, and SMSF managers should gain professional advice and guidance before they adopt this approach.

    Advantages of SMSFs

    Opting to manage an SMSF yourself rather than choosing an industry or retail super provides you with a number of different advantages.

    With an SMSF, you will have control over the asset allocation of your super fund. This will give you the opportunity to grow your revenue with asset investments across a number of different classes, including properties, shares from the domestic Australian market, or international shares from around the globe.

    Purchasing property assets is a sound strategy for growing the revenue of your superannuation. When you are in charge of managing the SMSF, you can leverage the best from your portfolio by investing in a range of different property classes, gaining access to revenue growth across different property cycles to optimise the fund.

    As the manager of your SMSF, you are able to make borrowing decisions. This enables the borrowing of money via loans registered to the SMSF — loans that are ring fenced for purchasing assets that grow the value of the super.

    SMSF Restrictions

    While managing your own SMSF does provide a lot of benefits, the process of operation may be complex and difficult to navigate. Learn more about some of the restrictions that are applied to SMSF managers.

    Managing an SMSF can be a difficult process and one that may appear confusing and complicated if you are inexperienced. 

    There are a number of fees and charges associated with running an SMSF fund. You will need to be prepared to meet these additional costs to optimise your growth of revenue for retirement.

    You will need to be very careful when reporting your SMSF tax to the ATO. Seeking professional assistance will help you to ensure that you remain tax efficient without overlooking any of the requirements, but will also increase your costs.

    You and other fund members will not be permitted to reside in any of the properties owned by your SMSF, including all residential and commercial properties. This includes properties purchased as a result of SMSF borrowing.

    SMSFs are governed by the SIS Act, or Superannuation Investment Supervision Act. If your SMSF’s investment strategy is in breach of the SIS Act, you may be subjected to heavy penalties. 

    SMSF Loans: Lending for SMSFs

    Self Managed Super Funds are permitted to borrow money for asset acquisition under a limited recourse borrowing arrangement. This means an SMSF trustee can receive a loan from a third party lender, not affiliated to any of the fund’s members. The loan amount may be used to purchase either a single asset or a grouping of identical assets, each of which will have the same value. The purchased assets will then be held in their own separate trust, although the proceeds from the assets will still be used to fund the SMSF.

    This kind of SMSF home loan — or an SMSF property loan to purchase a commercial asset — is designed specifically for growing the revenue of the SMSF and protecting the trustees. It cannot be used to purchase a property that a fund member will reside in.

    • SMSF lending rules differ depending on whether you are purchasing a commercial or a residential property.
    • Most lenders require a 70% loan to value rate (LVR) for commercial property loans.
    • An LVR of 80% is usually required for a loan to purchase a residential property.

    Refinancing SMSFs

    Refinancing an SMSF can be an effective strategy to optimise retirement savings and revenue, provided you use the right strategy. We can help you to decide on the best course of action and how to execute this action in the right way.

    • We specialise in helping our clients to refinance their existing SMSFs, gaining access to the most competitive interest rates on the market.
    • We will also adopt a policy of full transparency throughout the entire process. This includes offering a detailed breakdown of all the costs associated with refinancing as well as the potential savings on interest. All of this information is provided to help you make the right choice when it comes to your investments.
    • Please note that refinancing will not enable you to release equity in any properties owned by the SMSF.

    Why Use Sydney Brokers

    Here at Sydney Brokers, we are committed to providing lending and refinancing options to help you get more from your SMSF. With our guidance and expertise on your side, you will be able to make purchases of residential and commercial property assets within your own self managed super fund. From here, you’ll be able to develop a diversified and highly effective investment strategy.

    We work with you to find the loan options you need. You can evaluate these loan options with your financial advisor or accountant as you decide on the best approach for your SMSF. When you choose to work with Sydney Brokers, you can be assured that you are connecting the right range of loan options, including variable and fixed rate products, as we partner with a number of different lenders that meet various lending criteria. We can also put you in touch with loan providers who can offer offset accounts to assist with your SMSF lending strategy.

    Get expert advice from professionals who care

    The Sydney Brokers team won’t tell you how to invest. Instead, we offer a range of loan options for you to choose from, potentially saving you thousands of dollars in interest rates. We can also help you to understand the terms and conditions applied to each product so you have all the information you need.
    Reach out to Sydney Brokers’ advisors today to discover more and to get started.

    Get In Touch