As a pharmacy assistant, building wealth through property investment might seem challenging on your current income. However, using your superannuation through a Self-Managed Super Fund (SMSF) could provide an avenue to purchase commercial storage facilities. This strategy allows you to leverage your retirement savings while potentially generating steady rental income.
Understanding SMSF Loans for Storage Facilities
A Self-Managed Super Fund Loan enables you to borrow money through your SMSF to purchase investment property, including commercial storage facilities. Unlike residential investment properties, storage facilities often provide stable rental payments with lower maintenance requirements.
When applying for a SMSF Loan, lenders will assess several factors:
• Your SMSF's financial situation and borrowing capacity
• The loan to value ratio (LVR), typically capped at 70% for commercial properties
• The storage facility's income-generating potential
• Your SMSF's ability to service loan repayments
Finance & Mortgage Brokers who specialise in SMSF lending can access SMSF Loan options from banks and lenders across Australia, helping you find suitable interest rate options.
Benefits of Storage Facilities as SMSF Investments
Storage facilities offer unique advantages for pharmacy assistants looking to diversify their investment property portfolio:
Steady Income Stream: Storage units typically generate consistent rental income with multiple tenants reducing vacancy risks.
Lower Maintenance: Unlike residential properties, storage facilities require minimal ongoing maintenance and repairs.
Growing Demand: Urbanisation and smaller living spaces continue driving demand for external storage solutions.
Capital Gains Potential: Well-located storage facilities can appreciate over time, providing capital gains within your SMSF.
SMSF Loan Application Process
The application process for an SMSF Mortgage involves several documentation requirements. Your SMSF Finance & Mortgage Broker will guide you through gathering:
- Certified copy of the SMSF Trust Deed
- Certified copy of the Custodian Trust Deed
- SMSF financial statements (typically last two years)
- SMSF Bank statements
- Copy of contract of sale for the storage facility
- Property valuation and rental appraisal
Lenders offer both variable interest rate and fixed interest rate options. A streamlined application process through experienced brokers can help expedite approval times.
Interest Rates and Loan Structure
SMSF Loan Interest Rates for commercial properties like storage facilities typically differ from residential rates. Factors affecting your interest rate include:
• Your SMSF's financial strength
• The loan amount and LVR
• The property's income-generating capacity
• Current property market conditions
Some lenders may offer interest rate discounts for larger loan amounts or existing relationships. Your broker can negotiate these terms on your behalf.
Calculating SMSF Loan Repayments
When calculating SMSF Loan repayments, consider that your SMSF must generate sufficient income to cover:
• Monthly loan repayments (principal and interest)
• Property management fees
• Insurance and rates
• SMSF administration costs
• Any required capital improvements
The rental income from storage units should comfortably cover these expenses while contributing to your retirement savings growth.
Restrictions and Considerations
Using super to buy an investment property through SMSF loans comes with specific restrictions:
Property Type: Storage facilities are considered non-specialised commercial property, making them eligible for SMSF investment.
Related Party Transactions: You cannot lease storage units to yourself or related parties.
Stamp Duty: Your SMSF will pay stamp duty on the purchase, which varies by state.
Sole Purpose Test: The investment must be for the sole purpose of providing retirement benefits.
Professional Guidance Matters
For pharmacy assistants considering this investment strategy, professional advice is crucial. SMSF regulations are complex, and non-compliance can result in significant penalties. Working with experienced Finance & Mortgage Brokers ensures you understand all obligations and maximise your investment potential.
A qualified broker can help you:
• Compare SMSF Loan options across multiple lenders
• Structure the loan appropriately
• Understand ongoing compliance requirements
• Identify suitable storage facility investments
Making Your Move
Storage facilities represent an attractive investment option for pharmacy assistants using SMSF loans. The combination of steady rental income, lower maintenance requirements, and potential capital appreciation makes them worthy of consideration for your investment property portfolio.
Success requires careful planning, appropriate financing, and ongoing compliance with SMSF regulations. The right storage facility investment could provide substantial returns while building your retirement wealth.
Call one of our team or book an appointment at a time that works for you to discuss your SMSF loan options and take the first step towards purchasing your storage facility investment.
