What is an SMSF?

A Self-Managed Super Fund (SMSF) is a private superannuation fund which members manage on their own. This is unlike regulated super funds or industry super funds, which are managed for you by the fund itself.

Regulated super funds place your retirement funds into investments and insurance which they choose. Having the control to do this on your own is what brings many retirement-focused individuals to SMSFs.

But an SMSF can carry risk for those who don’t read the fine print or have the know-how to manage themselves. As always, consult your financial adviser or accountant before setting one up.

What are the SMSF benefits?


You have the autonomy to manage where your retirement funds are invested. You can diversify your investments as you see fit, perhaps between shares, residential property, and commercial property investment.

Use super to buy property

SMSF members can also use their super fund to buy property. This excites us property investors who know a good investment when we see one.

Buying real estate in your SMSF means you don’t have to worry about your retirement funds being eroded by a portfolio that is heavily invested in volatile stocks or low-yielding bonds.

Follow the link to read more about the benefits of using an SMSF to purchase commercial property.

Tax savings

Capital Gains Tax (CGT) is typically capped at 10% if the investment is made under the SMSF. And amazingly, certain SMSFs won’t even apply CGT to their investments.

For those borrowing under the Self-Managed Super Fund, interest accrued on the loan is tax deductible.

Borrow under a Limited Recourse Borrowing Arrangement (LRBA)

With an SMSF, you can apply to borrow from the bank under a Limited Recourse Borrowing Arrangement (LRBA) or non-recourse loan. This means the bank has limited recourse if your loan cannot be repaid. They cannot go after assets held in your personal name, meaning your car, your personal capital, and most importantly, your home, is as safe as houses.

How much does an SMSF cost?

The average cost to just set up an SMSF is $6,000 as of 2018. Financial planners can charge $5,000 per year to manage. And compliance costs can push the bill up even further.

Sure, SMSFs aren’t cheap. Which means if you’re considering using one, also consider how you’re going to recoup the costs.

Ensure you invest correctly

We wrote an article in The West Australian which labelled commercial property an SMSF winner. This is because of the costs involved in setting up an SMSF and the returns commercial real estate investment can offer. There’s no point paying the lengthy list of costs if you’re not leveraging from a high-yielding investment.

Commercial real estate typically provides investors with yields of between 5% and 7% (and sometimes even higher). This might be a smarter way to invest retirement funds over volatile stocks or sub-par yields from bonds, deposits, or even residential property.

We’ve found 89% of our investors invest in commercial property with an SMSF. So, we know the benefits.

To find out how you can set up an SMSF and invest in commercial real estate, get in touch with us today.

Any information provided on this website has not considered the objectives, financial situation or needs of any investor; investors should consider whether it is appropriate to them to partake in a commercial property investment prior to investing, in light of their objectives, financial situation or needs.