Client Success #43: Getting the SMSF Structure Right First
Their SMSF structure: Settled Before the Loan
We met a couple in their forties who wanted to invest in property through super, and who were careful to get it right. We took the time to understand whether a self-managed fund suited them at all, then designed the structure, the contributions and the insurance before any borrowing began. Their SMSF was set up on that structure, and their broker could carry on with the lending with a clear picture.
“We want to invest in property through super, but we don’t want to get this wrong.”
Client Snapshot
- A couple in their early to mid forties, with two salaried incomes
- Their own home, with a granny flat that earns rent
- About $200,000 in super and about $100,000 in cash savings
Their Goals
- Invest in property through super
- Be sure they got the structure right
The Challenges
- SMSF property raises structural, compliance and insurance questions
- The lending depended on getting those right first
- Rolling super over could affect the insurance they already held
Our Strategy
- Assessed whether an SMSF was appropriate for them at all, and confirmed it was
- Designed an SMSF structure ready for borrowing, set up in the right order
- Planned contributions to reduce how much they would need to borrow
- Checked the insurance in their existing super before any rollover
- Tested their cashflow under different employment scenarios to set realistic borrowing expectations
The Outcome
Their SMSF was established on the structure we designed, the group cover in their existing super was kept in place, and their broker could carry on with the lending with a clear picture rather than assumptions. As with any policy, the insurer assesses the claim.
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