Purchasing property through your SMSF is a multi step process that requires careful planning and execution. 

Here’s a step by step guide to help you understand what’s involved:

1. Set Up Your SMSF

Before you can buy property with your super, you need to establish an SMSF. This involves:

• Choosing trustees: Decide whether you’ll be an individual trustee or corporate trustee.
• Creating a trust deed: This legal document sets out the rules and regulations for your SMSF.
• Registering your SMSF: You’ll need to register with the ATO and obtain an ABN and TFN for your fund.
• Rolling over existing super: Transfer your super balance into the SMSF.

2. Develop an Investment Strategy

Your SMSF must have a documented investment strategy that aligns with the fund’s objectives. This strategy should consider:

• Diversification: Avoid putting all your eggs in one basket by balancing property investment with other asset classes.
• Liquidity: Ensure your SMSF has enough liquid assets to cover expenses, including loan repayments.
• Risk Management: Assess the risks associated with property investment and develop a plan to mitigate them.

3. Identify and the purchasing of a investment Property

Once your SMSF is set up and your investment strategy is in place, you can start using a property investment specialist. Important considerations include:

• Location: Choosing a property in an area with strong growth potential and rental demand.
• Type of property: Decide between residential or commercial property, depending on your investment goals.
• Due diligence: Conduct thorough checks on the property’s condition, legal status, and market value, a property consultant can assist here.

4. Arrange SMSF Financing

To fund the property purchase, your SMSF will need to secure an SMSF loan. A mortgage broker can assist you by;

• Loan application: Guiding you through the application process, ensuring all documentation is in order.
• Loan approval: Working with lenders to secure favourable terms and interest rates.
• Structuring the loan: Setting up the LRBA to protect your SMSF assets.

5. Manage the Property

After purchasing the property, your SMSF becomes responsible for its management, including:

• Rent collection: All rental income goes directly into the SMSF. Top Reasons Why You Should Use a Property Manager For Your Investment Property
• Property expenses: Maintenance, insurance, and other costs must be paid from the SMSF.
• Loan repayments: Regular repayments must be made from the SMSF’s funds.