AS WE APPROACH the end of the financial year, many Commercial property owners often seem rather confused as to all the Depreciation deductions they might be entitled to.
To help you, here are the most commonly asked questions — purely to highlight just how depreciation can significantly bolster the overall cash return you can extract from your Commercial property.
COMMERCIAL PROPERTIES are mainly seen as a longer-term (at least 3-year) investments. And you tend to buy them for their regular, high yields; as well as some for good capital growth over time.
Even so, an investor with a little knowledge and experience can easily find properties able to be "upgraded" and then, on-sold for a quick gain.
Typically, this would involve you in improving the income stream from your property; and perhaps the security of that income. Both of which would result in a boost to the property's overall appeal AND value.
Your Options for a Fast Turnaround [Read more...]
AS YOU DISCOVERED last week, carrying out a proper due diligence is vital for any significant Commercial property purchase.
And that's part of our role … assessing the overall structure, along with the various building services — simply to ensure they are all in good order.
However as time goes by, you may well have the need to upgrade or extend your building … if only to meet the changing needs of your tenants.
Yet this is where many investors seem to get into trouble — by undertaking something well beyond the limits of their capabilities. [Read more...]
Part 1: An Understanding, plus the Hidden Costs
WHENEVER YOU ARE financing a commercial property investment or a business, the types of funding can be broadly classified into two categories: bill facilities and non-bill facilities.
Bill facilities are charged as a margin over the inter-bank lending rates, published each day in the Financial Review as commercial bills; while non-bill facilities are charged as a straight interest rate.
The funds for these facilities may also be raised through the money markets, but they are priced on a simple interest rate basis over a loan term. [Read more...]
BEFORE EVEN beginning to answer this question, you first need to understand what a Caveat involves.
A Caveat is a document, which any person with a legal interest in a Property is able to lodge with the land registry (or titles office).
After registration, a caveat note appears on the Title giving prospective purchasers or financiers notice that a third party might have rights over the property.
The process of preparing, lodging and having a caveat registered with the land registry is quite straight forward. Accordingly, caveats are commonly lodged over properties without obtaining legal advice. [Read more...]
MELBOURNE is Australia's second-largest office market, and has remained relatively resilient since 2010.
A range of factors supported this, including … limited new supply and growth in absorption (driven by Australia's economic recovery during that period).
On the demand side in particular, the size and diversity of Melbourne's white-collar workforce was a key reason supporting the market's resilience, although on-going staff reductions in the finance and government sectors is lessening demand. [Read more...]
At some point, your Commercial Tenant will simply move on. It just happens from time to time.
THEREFORE, what we'll do here is explore some creative ways to address this … AND still maintain your sanity, at the same time.
But no matter which approach you adopt, there are several things you always need to do. [Read more...]
BEING A COMMERCIAL property owner, the Australian tax system allows you to claim a deduction from your income.
And that relates to the wear and tear upon the structure of a commercial property, and the depreciation of the plant and equipment items it contains.
Depreciation is available to all property owners who generate an income from that property. But the secret is to make sure you maximise these deductions, to boost your bottom-line cash flow.
By maximizing your tax depreciation deductions every financial year can make a huge difference to the tax you pay. And it may even result in the ATO paying money back to you, at the end of the year.
MANY PEOPLE will make the mistake of not carrying out a due diligence study BEFORE they acquire their Commercial properties.
But this can end up becoming a very expensive process — because you'll can often miss out on the property, if someone else snaps it up, before you?re able complete your study.
Therefore, the secret lies in ensuring you negotiate a deal ? where your due diligence occurs AFTER you have tied up the property, under a binding contract of sale.
Anyway, here are the 5 Key Elements you need to investigate … [Read more...]
BY NEXT WEEK, everything will appear different!
No, I'm not referring to the Commercial property market. Rather, how it will be presented to you.
Right now, this website is undergoing a total refurb. Very much like one of your investment properties you've been holding for a while.
And straight away, you will notice two key differences:
YOU NEED to look "behind the curtain" … and not allow yourself to become concerned by the recent headlines. Just remember: Media companies need to make sure their newspapers sell.
Last week, share market speculators drew breath rather sharply … as China's 3-month growth in GDP to March, came in at "just 7.7%".
True, this was down from the expected 7.9%; but it was still in line with China's overall growth, throughout 2012.
However, let's get real: Compared with anywhere else in the world, 7.7% is clearly an enviable figure. [Read more...]
"From a very early age ... Chris Lang has always sought to discover what the RULES were for each new challenge — so he could finally master them. And then go on to succeed, at whatever he undertook". More ...
