Unlocking Long-Term Value: Purchasing Practice Premises Through Your SMSF
A self-managed super fund (SMSF) can be a useful tool for utilising funds that would otherwise be held in an industry super fund. As per your accountant’s advice, you may use those funds to invest in a managed fund, or invest in property at your own discretion. When it comes to using your SMSF for purchasing your practice premises, Credabl has experience working with industry professionals such as financial planners, accountants and lawyers to make it happen.
We sat down with Credabl finance specialist Katie Kahler, to understand more about the process of utilising your SMSF to purchase your practice premises and who you might need to partner with to make it happen.
Understanding SMSF and its benefits
As the name suggests, a self-managed super fund is different from regular industry funds in the sense that it allows for more control over the investments held in the fund. There are still limitations to what can and can’t be done with your SMSF, which your accountant can take you through in greater detail.
It can be difficult to find a lender who will allow the purchase of practice premises through an SMSF, but as Katie explains, this is something that Credabl can achieve alongside relevant industry professionals for doctors, dentists and vets.
How SMSF lending can unlock opportunities
One of the significant benefits of financing your practice purchase through an SMSF with Credabl is the 90% Loan-to-Value Ratio (LVR) we offer. Katie highlights that this high LVR means you can retain more cash in your super fund compared to other lenders that require larger deposits, which can be difficult to pull together. For example, Katie recently assisted a client who initially believed a 30% deposit was necessary to purchase their practice premises. With Credabl's 90% LVR however, they only needed a $130,000 deposit from the $250,000 in their super fund. This left a $100,000 balance after government costs available for other investments and cash flow.
Additional benefits of purchasing practice premises through SMSF
Katie notes that buying property through an SMSF avoids the need to use personal cash or business funds for stamp duty, deposits and other setup costs. This is particularly valuable for clients setting up a new business, as maintaining cash flow is crucial. By utilising funds already available in their super, clients can focus their personal and business funds on other essential aspects of setting up the new practice, such as marketing expenses and maintaining a contingency fund, providing peace of mind during the setup or relocation of a business.
The role of expert support
Katie emphasises the importance of working closely with financial planners, accountants and lawyers who specialise in your industry. At Credabl, we have an extensive network of professional partners and can assist by introducing you to these specialists if you don’t already have them. Together, we can educate and guide you through the practice premise purchase process.
Why choose Credabl?
Partnering with Credabl means accessing a team that specialises in medical finance and connecting you with the right professionals. Katie points out that our expertise in SMSF lending and our tailored financial solutions make us an ideal partner for securing your practice premises. Whether you need assistance with using your SMSF for practice premise purchases or exploring financing options, Credabl is here to help.
Conclusion
Investing in your practice premises through an SMSF can be a strategic move that offers both security and financial benefits. With Katie's insights and Credabl's dedicated support, you can navigate this process confidently, ensuring it aligns perfectly with your professional and financial goals. If you’re ready to explore the benefits of purchasing your practice premises through an SMSF or want to know more, reach out to our team today to ensure you have the right support, or speak to Katie or any of our Credabl consultants on 1300 27 33 22.
Disclaimer
This article is a guide only and does not constitute any recommendation on behalf of Credabl Pty Ltd (ACN 615 968 100) or any of its related bodies corporate (Credabl). The information in this article is general in nature and we have not taken into account your personal objectives or financial circumstances or needs when preparing it. Before acting on this information you should consider if it is suitable for your personal circumstances. Credabl is not offering financial, tax or legal advice. You should obtain independent financial, tax and legal advice as appropriate.