How to Complete a Building Project on Time & on Budget

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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…]

Be Wary of Using Bank Bills

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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.

The Concept

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…]

To Caveat … Or Not to Caveat?

Caveat

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 Office Market is Holding Its Own

Melbourne-OfficesMELBOURNE 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).

Underlying Strength

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…]

The Tax Man and You

TaxDepreciationBEING 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.

A few facts about Depreciation for Commercial Properties [Read more…]

Proper Due Diligence is Vital

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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…]

Arranging Your Finance

Your Top 5 Tips ...

IT IS NO SURPRISE that banks are still rather coy about funding Developments, so maybe a few ideas on how to get your projects across the line could be helpful.

Here are the Top 5 Tips …

  1. Properly Assess Your Capital Requirements
    Do a thorough feasibility before proceeding with any project, to ensure you have sufficient funds to complete the project based on 80% funding of total costs. Make sure you factor into your calculations capitalised interest, for least 12 months.
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  2. Lock In Enough Pre-Sales
    Make sure you are aware of the number of pre-sales you will require. And also properly research the market — so you are confident the properties in your development will sell off-the-plan. If your development is not suited to pre-sales, ensure that you are able to arrange finance without pre-sales (or with a lower pre-sale requirement through a non-bank) before proceeding. [Read more…]

As a Commercial Landlord, How does the Personal Property Securities Act Affect You?

You can now protect your Personaal Property

TO BE HONEST, most investors have little or no idea of the added protection for Landlords, with respect to any personal property you make available to tenants — such as office furniture, or any other equipment.

Many of you would be aware that real property has historically been registered by the land title (or in some states, the registration of the lease). Whereas, personal property has not been registrable.

However with the creation of the Personal Property Securities Register, personal property can now be registered — and therefore, your rights fully protected. [Read more…]

Brand New … Rearing to Go!

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Expert-Panel

Bringing you Commercial Property in far Greater Depth.

NOTHING BEATS hearing it straight from an Expert in their field. Whether it is Legal matters, Finance, Due Diligence, Tax Depreciation, Valuation issues or about the Commercial property market … who better than those handling these specific areas day in, and died out?

And that’s why I’ve brought together an Expert Panel … to provide you with regular, in-depth articles on each of these aspects.

Meet all the New Contributors

[Read more…]

Commercial Property … With a New Look and Feel

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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:

  1. The articles will be presented in a modern “Newsy” format; and
  2. There will also be a wider range of topics covered — by a team of expert guest contributors. [Read more…]

How Will the Global Scene Impact Commercial Property?

The disparity in global Office Yields makes Australian Commercial property very appealing to overseas investors.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…]