Insider Tips to Help You Discover How to Succeed with Commercial Property
YOU SHOULD BE CAUTIOUS when entering into negotiations with foreign purchasers for the sale of property, due to the restrictions imposed by the Foreign Investment Review Board (“FIRB”).
Vendors should ensure that the contract of sale protects them when approval is required by the FIRB. Because, if the purchaser fails to gain approval, the FIRB can reverse the transaction. [Read more…]
IN THE CURRENT low-rate environment, demand for property funding has spiked considerably over the past couple of years, fuelling some concerns in various quarters for a property bubble.
As a result, most of the major banks have loan portfolios heavily weighted to property.
Slowly but surely, this has resulted in increased competitiveness for the small business sector, which has resulted in some attractive terms being offered for small business loans.
Below are some tips about business loans in the current market. These will be useful if you are looking at purchasing a small business or expanding your existing business:
If you have equity in residential property, you may be able to borrow at home loan rates.
The major banks tend not to allow business purpose for loans through their home loan departments, and will unnecessarily sell their customers into more expensive business loan products.
If you have equity and can afford the repayments, there is no reason to have a bank overdraft (sold at rates up to 13% pa) or even bill facilities that are subject to frequent review.
Before taking out a business loan secured by a residential property, explore the market for possible home loans for business use, they will be much cheaper and more flexible.
A suitably qualified mortgage adviser will be able to do this for you at no cost.
Most businesses live and die on cash flow. Therefore it is important to look past just the interest rate and fees on a loan and consider actual repayments.
This is the major benefit for using home loans where there is sufficient equity in residential property as they can be taken out interest only and usually rolled over continually.
Banks offer “unsecured” business loans against some businesses.
But these are subject to sharp amortisation periods (anywhere from 1-7 year loan terms). So consider the actual repayments as well as the rate before progressing with a particular loan product.
You are unlikely to get over 50% of the purchase price of a business. The exception to this is for well-established franchises, for which borrowing can be as high as 70%.
As discussed earlier, you may be able to use equity in property to bridge the gap, but you need to consider from where the capital will be raised.
If you are purchasing a franchise, banks will hold approved franchise lists outlining the terms that the bank will extend against a particular business.
It is worth speaking to more than one bank (or engaging a mortgage adviser to do it for you) to make sure you are getting the best deal as banks will vary on terms extended against each franchise.
For existing businesses there are many different types of financing that can assist with cash flow and growth strategies.
These include the following:
BOTTOM LINE: Too many business owners learn about these products only when they are in difficulty. Smart management demands that the right debt strategy be an integral part of any business planning.
COMMERCIAL BUILDING OWNERS remain unaware of the taxation benefits their property can generate. One of the most beneficial, yet often missed, deductions is building depreciation. [Read more…]
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ONE QUESTION often asked by inexperienced investors is whether or not you can manage your own Commercial property.
And clearly, the short answer is “Yes” … if you know what you doing.
However, owning a Commercial property means that you do have certain legal responsibilities. And among them are your property’s compliance with the various Essential Services requirements, under current Building Regulations. [Read more…]
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RECENT MEDIA HEADLINES have been dominated by vested political and community interests — following the Government’s May Budget.
The fact that there is screaming from so many quarters, probably means the Budget thrust is not too far off the mark. [Read more…]
IN THE FIRST Part of this series you discovered the first two tips to help you maximise the depreciation deductions that you can claim on your Commercial property.
Tax time is nearly here, take a look at the next four tips to make sure that you are claiming what you are entitled to. And not throwing money away. [Read more…]
ARE YOU maximising your Commercial property depreciation deductions this financial year?
Tax time is approaching quickly and you are probably preparing to visit your Accountant to complete your annual income tax assessment. [Read more…]
PERHAPS THIS is might appear to you as something out of “left field” … but more and more investors are using PAFs to manage their charitable donations. [Read more…]
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AN ARTICLE in the Weekend Financial Review (Page 39) opened with … “Macquarrie Group, a bellwether for the strength of the office leasing market, is expanding.”
And this clearly accords with a recent report released by BIS Shrapnel, which confirmed the Office recovery would be stronger in “service and trade exposed markets like Sydney and Melbourne, but weaker in the mining-based markets such as Perth and Brisbane.” [Read more…]
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THE RBA RECENTLY confirmed a neutral bias, when it announced its latest decision to keep the official interest rate on hold.
Inflation appears to be relatively steady — and still well within the RBA’s stated band for comfort.
Furthermore, the feedback from the Residential market is that house prices in Sydney and Melbourne now appear to be levelling out.
The RBA was keen to see the Residential market slow somewhat. However, if that doesn’t remain the case, it may need to look to increase in interest rates. [Read more…]
THE AUSTRALIAN Taxation Office (ATO) allows you, as a Commercial property owner, to choose between two methods of claiming depreciation on the fixtures and fittings within your investment properties.
These are the Diminishing Value and the Prime Cost methods of depreciation. [Read more…]
WITH EVERY NEGOTIATION, you always need to be thinking on your feet. And here are several simple Tips to help you do just that.
WHEN YOU EMBARK on your journey as a property investor, it can be overwhelming – with a flood of information and diverse opinions. To help simplify the process, here are five essential tips for new (and seasoned) investors.
IT DOES NOT MATTER whether you’re an investor or an owner-occupier, there are several important factors to consider when purchasing a commercial property to ensure you make the right choice.
In a previous article, I shared a handy App to assist you in shortlisting potential properties. If you haven’t already downloaded it, simply click on the HiReturn Filter over on the right, to install it on your tablet or mobile device.
THERE IS A BELIEF among many experts that a surge in the stock market typically precedes a recovery in the commercial property market by about six months. And the start of this year saw equity markets gaining some momentum.
I HAVE BEEN ASKED countless times about the secrets to a successful negotiation. And I want to share with you the key elements to help make your negotiations effective.
But first, just watch this short video to gain a quick understanding of these three essential elements that form the foundation of every negotiation.
If you’re new to investing, you might be wondering if it’s possible to manage your own commercial property. The short answer is “yes”, but only if you know what you’re doing.
It’s important to note that owning a commercial property comes with certain legal responsibilities, particularly when it comes to compliance with Essential Services requirements under current Building Regulations.
The current trends in the business have made it clear that office landlords have to cater to the needs and preferences of their tenants. Building owners and managers (who understand and meet these demands) will be able to command higher rents and reduce vacancy rates.
To expand on this, here are four key tips to help attract quality tenants.
