SMSFs: Smarter, Advanced Strategies (and How AAA Makes Them Work)

Self-Managed Super Funds (SMSFs) give you control, flexibility and a real say in how your retirement wealth is built. Most people know the basics. Where SMSFs really come into their own is when you use them well, with the right structure, lender, and cash-flow plan behind the strategy.

In our decades of experience, we’ve seen the higher-impact ways SMSFs can be used in the real world, the traps to avoid, and learned how to design a strategy that holds up under scrutiny - through lender assessment, audit season, and the years that follow, while aligning with your goals and compliance obligations.

Why SMSFs are back on the radar

Two things are driving interest. First, control: members want to decide what they own and why, rather than accept a default mix. 

Second, clarity: used well, an SMSF can hold assets (often property) in a way that’s separate from your personal finances, which can unlock options many borrowers don’t realise they have.

The strategies that move the needle

Buying property via an LRBA, done properly

Limited Recourse Borrowing Arrangements let an SMSF borrow to purchase a single asset (commonly a residential or commercial property). The appeal is obvious, but the execution matters:

• Lenders: the major banks generally don’t write new SMSF loans; it’s a specialist non-bank/private market with very different policies, LVRs and covenants.

• Cash flow: rent, contributions and a sensible buffer (often 6–12 months of repayments/expenses) are key.

• Improvements vs repairs: improvements can trigger extra rules; you need a clear plan before you start.

  
  

A simple example: A two-member fund buys a $1.2m commercial suite on a 70% LVR. The lease is strong, the LRBA is fixed for five years to manage rate risk, and the fund keeps a 9–12 month buffer. The structure is boring, in the best possible way.

Business real property - paying rent to your future self

If you’re self-employed, the fund can own your premises and lease it to your company at market rent. That rent flows into super, helping grow retirement assets while your business enjoys long-term stability. The paperwork has to be squeaky-clean (independent rent checks, proper lease terms), but when it’s done right, it’s a powerful wealth anchor.

Keep the streams separate

One thing many people don’t realise: an SMSF loan is usually assessed within the fund, not against your household spending. Likewise, your personal credit cards and school fees don’t typically count against the fund’s ability to borrow, provided the SMSF is sound. Separation, when structured correctly, is a genuine advantage.

Build a portfolio that can breathe

Property can be a core holding, but concentration risk is real. Your investment strategy should show how the fund will stay liquid (cash, term deposits, ETFs) for expenses and pensions, and how you’ll handle rate moves and vacancies. Auditors and lenders care about this, and so should you.

Contributions, pensions and tax timing

This is where your accountant earns their fee. Blending concessional and non-concessional contributions, planning for transition-to-retirement, and timing drawdowns can all improve the fund’s resilience and tax position. The lending structure needs to complement that plan, not fight it.

Common pitfalls (and how we steer around them)

• Treating major renovations as “repairs” under an LRBA

• Thin liquidity (no buffer for vacancies, rates or tax)

• Under-documented related-party leases

• Over-reliance on one tenant or one asset

• Assuming any lender will do (SMSF lending is a niche)

  
  

Why lender choice is different here

Because banks don’t offer SMSF loans, your options sit squarely with non-bank and private lenders. The upside is greater flexibility on structure and speed to approval; the trade-off can be sharper covenants or higher pricing. Choosing the right lender and structuring for the asset, lease profile, and time horizon is critical, and it’s the market we navigate every day.

Two quick scenarios

Self-employed owner with a clinic

The SMSF acquires the rooms; the practice pays market rent to the fund. Rent plus member contributions comfortably meet LRBA repayments, and the fund keeps a 12-month cash buffer. The lease is independently reviewed each year. Result: business stability now, retirement asset later.

Dual-income household with high personal outgoings

Personal borrowing capacity is tight, but their SMSF has strong contributions and healthy cash. The fund buys a modest commercial suite on a conservative LVR. Because the LRBA is assessed inside the fund, the household’s personal expenses don’t derail the SMSF strategy.

How AAA can help

AAA Mortgages works in this specialist space every day. We understand the lender landscape for SMSFs (bank, non-bank and private), how to structure LRBAs, and what auditors and lenders expect. We’ll coordinate with your accountant and adviser so the lending solution aligns with compliance, cash flow and long-term retirement goals.

SMSFs are powerful, but they reward precision. At AAA Mortgages we:

• map your objectives with your accountant/adviser so lending supports compliance, cash flow and tax planning

• source from a wide panel of specialist SMSF lenders (non-bank and private) and negotiate terms that fit your asset and timeline

• structure buffers, leases and documentation so your application and audit experience are boring (in a good way)

  
  

If you’d like to hear more, we recently discussed SMSFs on the P.O.W.E.R. Podcast with our in-house SMSF specialist Dale Walsh, covering how the loans are assessed, where they fit, and the practical realities of funding property within super.

Ready to explore an SMSF the right way?

Speak with the AAA team. We’ll review your goals, reality-check lender options, and design a structure that’s robust now and resilient later.

Important note

This is general information only, not personal financial, tax or legal advice. SMSFs have strict rules - always seek advice from a licensed financial adviser and tax professional before acting.