A Discussion Worth Having: The Questions to Ask Before SMSF Lending
SMSF lending is one of those strategies that sounds straightforward on the surface — “use super to buy property” — but becomes far more complex once you start pulling it apart.
From our perspective as brokers, the difference between a strong SMSF lending outcome and a painful one usually comes down to the quality of the early conversations.
Not sales conversations — real discussions.
These are the questions we encourage people to ask us, because they lead to clarity rather than assumptions.
“Is SMSF Lending Actually Right for My Fund?”
This is always the starting point.
Not every SMSF should borrow, and not every fund benefits from property exposure. A good discussion should explore why SMSF lending is being considered and what problem it’s meant to solve.
If the answer is simply “because I can”, that’s usually a sign to slow down.
“How Does This Fit With My SMSF Investment Strategy?”
SMSF lending must align with your documented investment strategy — not the other way around.
A proper discussion looks at diversification, liquidity, risk tolerance, and time horizon, rather than jumping straight to loan numbers.
“How Much Should the Fund Borrow — Comfortably?”
Lenders will tell you how much your SMSF can borrow.
The more important conversation is how much it should borrow.
We look at cash flow, buffers, contributions, and what happens when things don’t go perfectly — because they rarely do.
“What Happens If Conditions Change?”
This is where discussions get real.
Interest rates rise. Tenants leave. Contributions change.
A strong SMSF lending strategy should still work — or at least remain manageable — under less-than-ideal conditions. If it doesn’t, the risk may outweigh the benefit.
“What Restrictions Do I Need to Be Comfortable With?”
SMSF lending comes with strict rules.
Discussions should cover:
- Why improvements are restricted
- Why personal or related-party use isn’t allowed
- Why flexibility is lower than personal property ownership
Understanding these upfront prevents frustration later.
“What Does This Really Cost — Over Time?”
SMSF lending costs more than just interest.
A proper discussion looks at setup costs, legal structures, accounting, audits, and ongoing administration — and how these affect long-term returns.
“How Does This Affect Liquidity in My Super?”
Property is illiquid, and SMSFs still need cash.
We often talk through how much money should remain outside the property, and what happens if the fund needs access to cash unexpectedly.
“What’s the Exit Strategy?”
Good strategies include an end point — even if it’s years away.
Discussions should cover selling the property, loan repayment, and how the strategy fits with retirement timing and pension phase.
“What Are the Biggest Risks — Honestly?”
Every strategy has risk.
The right discussion doesn’t avoid this — it addresses it directly and explains how those risks can be reduced or managed.
“Who Else Needs to Be Involved?”
SMSF lending isn’t done in isolation.
It usually requires coordination between brokers, accountants, and legal advisers. A clear process helps avoid delays, rework, and compliance issues.
Why These Discussions Matter
Most SMSF lending issues don’t come from bad intentions — they come from unanswered questions.
When the right discussions happen early, the strategy becomes clearer, more conservative, and far more likely to succeed.
Let’s Have the Right Conversation
If you’re considering SMSF lending, the most valuable first step isn’t an application — it’s a conversation that pressure-tests the idea.
We’re always happy to talk through the questions, challenge assumptions, and help you decide whether SMSF lending genuinely improves your retirement position.
Book an SMSF Lending Strategy Discussion
Good SMSF strategies are built on good conversations — not rushed decisions.
