Using Your Super to Buy Industrial Property
As a current or former Australian Defence Force member, you've likely built up substantial superannuation savings throughout your service. One powerful way to grow these funds is by using your Self-Managed Super Fund (SMSF) to purchase an industrial property. This strategy allows you to use super to buy an investment property while potentially benefiting from rental payments and long-term capital gains.
Industrial properties can include warehouses, manufacturing facilities, storage units, and other commercial spaces. These properties often provide stable rental income and can be an excellent addition to your investment property portfolio.
Understanding SMSF Loan Options
When applying for a SMSF Loan to purchase industrial property, you'll need to access SMSF Loan options from banks and lenders across Australia. The application process involves several key considerations that differ from standard investment property loans.
Your borrowing capacity will depend on several factors including:
• Your SMSF's financial situation
• The property's rental income potential
• The loan to value ratio (LVR) requirements
• Your super fund's existing investment property holdings
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Book a chat with a Finance & Mortgage Brokers at Defence Loans today.
Key Requirements for SMSF Industrial Property Loans
The SMSF Loan application requires specific documentation that lenders use to assess your fund's capacity. You'll typically need to provide:
• Certified copy of the SMSF Trust Deed
• Certified copy of the Custodian Trust Deed
• Recent financial statements for your SMSF
• SMSF Bank statements covering the required period
• Copy of contract of sale for the industrial property
• Property valuation and rental assessment
Most lenders classify industrial properties as non-specialised commercial property, which affects both the loan terms and LVR requirements. Industrial properties typically require a lower LVR compared to residential investment properties, meaning you'll need a larger deposit.
Interest Rates and Loan Structure
SMSF Mortgage interest rates for industrial properties are generally higher than residential investment loans due to the commercial nature of the asset. You can choose between:
Variable Interest Rate Options:
• Rates that fluctuate with the property market conditions
• Potential for interest rate discounts based on your SMSF's financial strength
• Flexibility to make additional repayments
Fixed Interest Rate Options:
• Certainty in calculating SMSF Loan repayments
• Protection against interest rate increases
• Terms typically available from one to five years
Financial Considerations Beyond the Loan
Purchasing industrial property through your SMSF involves additional costs that you need to factor into your planning. Stamp duty on commercial properties is often higher than residential properties, and the rates vary between states.
Your SMSF will be responsible for all ongoing costs including:
• Property management and maintenance
• Insurance premiums
• Council rates and land tax where applicable
• Regular property inspections and compliance costs
Restrictions apply to how your SMSF can use the industrial property. The property must be purchased solely for investment purposes, and you cannot personally use the facility or provide services from the premises.
The Application Process
Many lenders now offer a streamlined application process for SMSF loans, though industrial properties require additional assessment compared to standard residential investments. The lender will evaluate both your SMSF's financial capacity and the specific industrial property you wish to purchase.
Factors that can strengthen your application include:
• A strong rental history if expanding your property portfolio
• Substantial SMSF balance beyond the required deposit
• Experienced property management arrangements
• Long-term lease agreements with quality tenants
Why Choose Defence Loans for Your SMSF Industrial Property Loan
At Defence Loans, we understand the unique financial circumstances of current and former ADF members. Our team has extensive experience helping defence personnel access SMSF loans for ADF members and can guide you through the complexities of industrial property investment.
We work with multiple lenders to find SMSF Loan Interest Rate options that suit your fund's requirements. Whether you're buying your first investment property through your SMSF or adding to an existing portfolio, we can help you understand your borrowing capacity and structure the most suitable loan.
If you're considering investment loan refinancing for ADF members or want to explore how an SMSF industrial property investment could work for your situation, our experienced team can provide personalised guidance.
Building wealth through property investment while serving your country requires careful planning and the right financial partner. Call one of our team or book an appointment at a time that works for you to discuss your SMSF industrial property investment goals.
