Business Premises in Self Managed Super – Some Disadvantages

Business Premises in Self Managed Super – Some Disadvantages

Business Premises – Some Disadvantages

There are many benefits in owning your business premises through your SMSF, but there are a number of disadvantages to consider before making a decision. Depending on the size of your SMSF, purchasing a single commercial property could have a major impact on diversification within your fund.

If you have a large multi-million dollar super fund, and several premises, this may not be an issue, but if you have the usual SMSF balance you may find that a commercial property purchase will see a dangerously high percentage of your retirement savings held in a single asset.

The issue is that if your property or commercial property as a whole suffers a major drop in value, the value of your entire SMSF balance will suffer a similar drop. It is important to have your SMSF sufficiently diversified to avoid such dangers.

Another potential disadvantage is the lack of flexibility offered when purchasing your own business premises. If your business outgrows your premises, having to go through the buying and selling process again can be very costly when compared to simply switching leased premises.

When purchasing your own business premises via your SMSF it is important to take into account your future growth and space needs that could affect your choice of property.


About SuperBenefitnews

Self-Managed Superannuation Service Providers in Australia. SuperBenefit provides a wholistic SMSF assistance, education and administration service continuum - 1. “assistance” is help of whatsoever nature where our overall SMSF experience and knowledge enables us to provide assistance/help without any legal (or “license”) limitations. 2. “education” involves providing knowledge through teaching, coaching and mentoring about all matters SMSF, including (but not limited to) investment issues such as equities and property, 3. “administration” encompasses all admin aspects of legally required SMSF trustee and member record keeping including (but not limited to) audit and ATO matters. In keeping with our key point that SuperBenefit does not provide Financial Advice, where issues arise from 1, 2, and/or 3 above Indicate a need for a legally authorized provider (such as a Financial Adviser) and the client does not have their own service provider, the client can utilize SuperBenefit’s ‘Connect Assist’ … SuperBenefit, in itself, does not provide Financial Advice, but it does provide the wherewithal for great SMSF service. WE do not provide Financial Advice or any other service that requires a legally authorized provider. However, where such advice or service is required we have our ‘Connect Assist’, a SuperBenefit resource we use to connect clients to a Licensed Advisor or other legally authorised service provider. Call us 0407 361 596, no obligation FREE Connection call to see how we can help you!
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