How To Buy a Commercial Property with your SMSF and Rent it Back to your Business
Self-Managed Super Funds (SMSFs) can be used to invest in a variety of assets. One such asset that has become popular amongst Australians is the purchase of commercial property for both rental and capital gains purposes. This post will look at how you can use your SMSF to buy a commercial property and then rent it back to your business.
The Benefits of Buying Commercial Property with Your SMSF
There are many advantages associated with buying commercial property with your SMSF, including tax savings, potential rental income, and capital growth. Not only that but when you rent the property back to your business, there are additional benefits such as potential tax deductions on the rent payments. Furthermore, if you have an existing business premises, you may be able to free up working capital by renting the property from your SMSF.
Considerations Before Purchasing a Commercial Property
Before making any decision on whether or not to purchase a commercial property with your SMSF, there are a few considerations that need to be considered. Firstly, make sure that you have enough money in the fund to cover all associated costs such as stamp duty and legal fees. Secondly, consider what type of tenancy agreement you wish to enter into with your business; this should include factors such as length of lease and any special conditions which may apply. Finally, make sure that the investment is compliant with all relevant laws and regulations; this includes ensuring that it does not breach any superannuation limits or restrictions imposed by legislation or regulatory bodies.
How To Purchase A Commercial Property With Your SMSF
Once you have taken all necessary considerations into account, it’s time to start looking for properties that meet your requirements. It’s important that you get assistance from an experienced professional who knows their stuff when it comes to purchasing commercial property – they will be able to help advise you on the best approach and guide you through the process step-by-step. Once you have found a suitable property, ensure all documentation is completed correctly before signing off on anything; this should include things like contracts between yourself and any third parties involved in the transaction (such as real estate agents).
Buying a commercial property with your SMSF can be an attractive option for many investors seeking long term capital growth or rental returns from their investments. However, it’s important that investors do their research first so they know exactly what they are getting themselves into before signing off on anything. By taking all necessary considerations into account before purchasing a commercial property with their SMSF, Australian investors can rest assured knowing they are making an informed decision about their investment strategy. With careful planning and guidance from experienced professionals throughout the process, investors can reap rewards from investing in commercial properties for many years down the line.