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Thoughts on buying a commercial property in your SMSF for your own business

Discussion in 'Commercial Property' started by Foxdan, 8th Dec, 2015.

  1. Foxdan

    Foxdan Well-Known Member

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    I was wanting to hear people's thoughts, for and against buying a commercial property for your own business.

    I've been leasing a commercial property for 5 years and the basic outgoings are about 50k per year. We need to upgrade soon to a larger facility and I've been thinking about buying one in our SMSF and putting 50k per year plus 30k super towards that. My main reasoning is that it's an additional 50k per year that I could use for investing that won't affect my business or personal finances.

    What are people thoughts. I haven't looked into commercial loans or details yet so any advice is welcome.
     
  2. Shady

    Shady Well-Known Member

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    Being a commercial agent on Sydney's Lower North Shore, I'd say 70% of owner occupier sales we do are to super funds. Go and see your accountant and get it setup properly. Budget for at least 40% deposit....Most banks want 30% but we're finding valuations are coming back 5-10%under purchase price.
     
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  3. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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  4. Scott No Mates

    Scott No Mates Well-Known Member

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    @DaveM has purchased within super for his offices. No regrets there afaik.

    You must put a lease in place and ensure that the transaction will withstand scrutiny ie no favours.
     
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  5. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    One other thing to consider is - what if you outgrow the purchase property?
     
  6. Scott No Mates

    Scott No Mates Well-Known Member

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    Buy another?
     
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  7. Ace in the Hole

    Ace in the Hole Well-Known Member Premium Member

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    If buying a commercial property via super for your business to use, does the loan have to come from a financial institution, or can the business provide the loan to the super fund?
     
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  8. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    related party loans are possible.
     
  9. wogitalia

    wogitalia Well-Known Member

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    It can be a complicated and somewhat expensive mess to set it all up (especially if borrowings are required) but the benefits of doing it more than justify it.

    It's 100% something you should seek professional advice on though because there are an awful lot of pitfalls you can get tripped up by.
     
  10. Itsme

    Itsme Member

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    We have been selling commercial bu
    We have built and sold dozens of commercial buildings/Stratas to smsf in Brisbane, who subsequently lease back to their business.

    It is one of the best financial strategies out there and the Government will likely reverse the rules given the amount of tax individuals are saving. I doubt the changes will be retrospective to those who have already have it in place.

    There are also smart ways to structure the sale price in order to help with lvr and funding.
     
  11. D.T.

    D.T. Adelaide Property Manager Business Member

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    Best to talk to a broker like @Corey Batt who sets this stuff up day in day out
     
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  12. DaveM

    DaveM Adelaide Buyers Agent & KFC Strategist Business Member

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    Oops missed this tag. Yes I have bought 2 x CIP's in SMSF. I do a lease and have a market appraisal done by the selling agent for the net sqm rate for the property so I have evidence of a market rate should there be any question in the future on not leasing at commercial rates.
     
  13. Westminster

    Westminster Tigress at Tiger Developments Business Member

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    Note corey would just be for the lending side - still need an accountant and/or lawyer to set up the SMSF and ensure it complies from that side.