Buying A Commercial Property With Super

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Buying a commercial property with super can be a gamechanger for small and medium-size business owners. If you are a small to a medium-sized business owner that currently rents commercial premises it could be an option for you. Using your self-managed super fund (SMSF) balance to invest in your own commercial property, provides you with your deposit.

It is increasingly more popular to invest super funds in commercial property over residential as the returns can be greater. Not a business owner but still want to pursue buying commercial property with super? At Corbwood & Associates, we can help you use your self managed super fund balance to do exactly that. 

Commercial Property Investment

Commercial property investment is more popular with SMSF investors than residential property investment. The same regulations as residential property investment apply (link to residential blog here for more context), with one major difference. Unlike residential property, small and medium-sized business owners are permitted to buy commercial property with super and lease it back to themselves. 

However, there are a few caveats:

  1. The lease terms must be commercially competitive and/or at market value. 
  2. Regular valuations on the property are required to be submitted as part of your auditing to ensure point 1 is met. 
  3. Rent must be paid in full, on time, every time. There is no leniency just because you are the investor. You must honour the terms as you would with any lease or rental agreement.    

Note that all rent accrued from buying commercial property with super is to be paid back into your SMSF. The fund pays for all expenses related to the property (including council rates, water rates, land tax, property management fees and insurance premiums) and any loan repayments. 

Financing Commercial Property Through SMSF Investing

As with any property purchase, securing competitive finance is a must. In the case of lending for SMSF investments however, it is incredibly complex. Should you be a small to medium-sized business owner looking to secure finance in addition to this, it can seem unachievable. 

It is for this reason that we recommend contacting Corbwood & Associates. We explain the lending criteria for investing using your SMSF (link to lending blog), ensuring you remain compliant and borrow with competitive terms and conditions. 

Engage The Experts 

Before buying commercial property with super, you should seek professional advice. This is not just to ensure compliance but to ensure your financial position in retirement is not compromised. At Corbwood and Associates, our team is made up of fully qualified and licensed professionals who understand your needs. 

We are passionate about providing quality advisory services for:

  • Property investment via self-managed super funds, both residential and commercial. 
  • Refinancing and first time home loans.
  • Property investment advice and wealth creation strategies.   

Contact us to arrange a consultation to see how we can help secure your financial future.

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