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Home Loan Variable: 5.94% (5.95%*) • Home Loan Fixed: 5.79% (6.39%*) • Fixed: 5.79% (6.39%*) • Variable: 5.94% (5.95%*) • Investment IO: 6.19% (6.85%*) • Investment PI: 5.99% (6.61%*)

Steps To Buying A Property Through A Self-Managed Super Fund


What Are The Steps To Buying A Property Through A Self-Managed Super Fund (SMSF)?

The team here at Mortgage World Australia does a lot of loans for investors. They also buy real estate through their self-managed super funds. So we do a lot of SMSF loans.

The reasons one might buy a property in an SMSF include:

  • Diversify their super so it is not all invested in the share market
  • They have run out of borrowing capacity in their personal names and can therefore purchase no more investment properties. If the proposed rental income and the employer superannuation contributions are sufficient to service the loan in the SMSF the financial situation outside the super fund has no bearing on borrowing capacity.

There is no way to directly own real estate in superannuation without setting up an SMSF. There are first-time investors who would also like that same diversification but don’t know what’s involved in setting up an SMSF and getting their first property.

Here are the key steps along the journey.

Step 1 - Speak to a Mortgage Broker

This is the important first step because it determines what you can realistically be approved to borrow – which in turn determines if you can actually afford an investment property in your SMSF. The rules are slightly different for getting a loan in your SMSF approved compared to just borrowing for a home loan – so no assumptions.


Step 2 - Get professional advice

Get professional advice. The reason I said do this second is because getting this type of advice is expensive. You’ll need advice about your investing strategy, setting up your SMSF structures – the SMSF trustee company, the SMSF trust and the bare trust that will hold the property (this needs to be done when you actually buy) and even the name that needs to go on contract before you put your offer in… this is critical as there are a lot of mistakes you could make trying to go it alone.


Step 3 - Rollover your super

This can be done at the same time as the next step. But this is when you ‘go live’ and set up your SMSF so that it is ready to hold your SMSF investment property.


Step 4 - Buy your investment property

This is when you put in your offer, get your unconditional loan approval and you achieve your goal of owning an investment property in your SMSF. Remember any income generated from the property, such as rental income, must be deposited into the SMSF’s bank account.


Step 5 - Manage your investment property

Last and by no means least now that you own your investment property, you need to find tenants, collect rent, pay expenses, and maintain the property. All income and expenses related to the property must be recorded and reported to the ATO. You will also need an accountant to prepare the financial statements and tax returns each year for the SMSF.

While finance is only a small part of the journey to owning an investment property through your SMSF, it is a critical one. The team at Mortgage World Australia can help you make your investment goals a reality. For a no-cost, no-obligation finance strategy session call 1300 661 211 or go to finally, if you need help putting together the rest of your team to purchase property in your SMSF, we can connect you with people to help fill in the rest of your team.

Ask us a question and we will get back to you within 1 working day

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