In case you want to buy real estate as a means of growing your superannuation, a Self Managed Super Fund loans (SMSF) may be just what you need to open the road to keeping your wealth for a long time. The ROVO team is committed to helping Australians check out various SMSF loan offers and understand the intricacies of taking a loan under a super fund set-up.
What Is an Self Managed Super Fund Loans?
An Self Managed Super Fund Loans allows your super fund to borrow money to purchase an investment property under a structure called a Limited Recourse Borrowing Arrangement (LRBA). This means the lender’s claim is limited to the asset purchased—not the entire fund—offering protection for your other super assets.
How SMSF Loans Compare to Standard Investment Loans?
Important: SMSF loans are strictly for investment purposes. You cannot live in or lease the property to related parties unless it’s a commercial property under specific conditions.
Key Considerations When Comparing SMSF Loans
- Interest Rates: SMSF loans generally come with higher interest rates than standard loans due to added risk and regulatory requirements.
- Fees and Charges: Look out for application fees, ongoing account fees, and legal costs associated with the LRBA structure.
- Loan Features: Some lenders offer redraw facilities, offset accounts, or fixed-rate options—though these are less common in SMSF lending.
- LVR Restrictions: Most SMSF loans cap borrowing at 70–80% of the property value, meaning your fund must have sufficient liquidity for the deposit and costs.
- Compliance: Your SMSF must meet strict ATO guidelines, including having a compliant trust deed and investment strategy.
Is Self Managed Super Fund Loans are Right for You?
Self Managed Super Fund Loans can be a powerful tool for building retirement wealth through property—but they’re not for everyone. They suit investors who:
- Have an established SMSF with sufficient funds
- Understand the long-term nature of property investment
- Are comfortable with regulatory compliance and financial planning
- Want greater control over their super investments
Tips for Maximising Your Self Managed Super Fund Loans Strategy
Planning in an SMSF loans situation is necessary if one wants to enhance growth in his/her fund and at the same time manage the risk properly. Your first step should be to write down your investment objectives and make sure that the property is in line with your SMSF’s investment strategy. Find out as much as you can about the properties you might want to invest in. This should involve rental yield, location growth prospects and long-term capital gains potential. Remember that lending to an SMSF is accompanied by higher costs both at the start and during its period, thus besides fees, legal requirements and property maintenance, you should also budget for these costs. It is also very important that you diversify your portfolio i.e., you do not place all your super assets in one property. Finally, take the advice of professionals such as financial planners, accountants, or mortgage brokers who have experience in SMSF lending, to be sure you follow ATO regulations and benefit from tax advantages. With meticulous planning, Self Managed Super Fund Loans may turn out to be an elegant solution to increase your retirement wealth while at the same time holding tight to your superannuation investment’s control and flexibility.
At Rovo, we help you assess your eligibility, compare loan options, and structure your borrowing to align with your retirement goals.
Ready to explore SMSF lending?
Let’s compare your options and find a loan that fits your fund’s strategy.
Call us on 0494 394 747 or email jitendra@rovofinance.com.au
FAQs
An Self Managed Super Fund Loans is a limited-recourse borrowing arrangement (LRBA) that allows a SMSF to borrow money to purchase a single investment asset—typically residential or commercial property. The lender’s recourse is limited to the asset purchased, not the entire fund.
While not always mandatory, most lenders strongly prefer or require a corporate trustee due to clearer asset ownership, easier administration, and reduced legal risks.
Yes. It is strongly recommended and sometimes required to seek advice from A licensed financial adviser, An accountant experienced in SMSFs or solicitor for trust structures. You can seek advice from ROVO Finance also as they are expert in the finance sector. This ensures compliance with ATO and SIS Act regulations.
