Investing in Commercial Premises Through a SMSF

smsf-commercial-property

Investing in Commercial Premises Through a SMSF

Some of the most critical decisions a business owner will make are about their premises: whether to rent or buy, where to base the business and even the style of the property is important to get right. For those with an SMSF, there is one more option to consider: finding business premises and an investment property at the same time.

Figuring out whether buying your commercial premises through your self-managed super fund (SMSF) is an option that’s suitable for you is crucial to the success of your investment.

It can be very profitable purchasing commercial property through your SMSF, including creating a certain level of freedom by smart use of resources.

It frees up capital for the business owner. They are unlocking super to do more for them.

Further to this, the property is protected against insolvency. This can be particularly appealing depending on the type of business.

There’s a tremendous level of protection of assets within superannuation, so it ticks the asset protection box for a lot of SMEs that may be subject to litigation due to the nature of what they do.

On the flip side of this, a word of warning regarding obligation. There is a huge element of responsibility with regards to compliance. You are the trustee of an SMSF and you need to fully understand what those responsibilities are.

You must pay commercial rates for rent through a prearranged lease agreement and, although having a protected asset is great for some businesses, it also means that equity is locked within the fund. You can’t take earnings elsewhere.

Want to know more about SMSF? Let us help you. Call Chris today on 0490 075 039 or send an email to info@chardon.com.au