Never Cross Collateralize Your Loan Arrangements

Cross-Collateralizing
Part 1: Don’t be easily Swayed by your Bank.

A COMMON piece of advice given by mortgage brokers to Commercial property investors — at least, by astute brokers — is to keep securities for each loan separate. In other words, any form of Cross Collaterization (as it’s known) is to be avoided at all costs.

So, just what is Cross Collaterization; and why is it so bad?

Put simply, it is the combining of one mortgage registered against two or more properties (or sometimes even your business) as security. [Read more…]

5 Common Myths About Commercial Property

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Myths
HERE ARE several common misconceptions I frequently hear, when people are looking to embark upon Commercial property investing.

1. Securing Commercial properties using the internet is easy.

There are some people starting out in who feel they don’t need any professional help with this. But finding a suitable property is only half the task.

The other half involves properly assessing the property — both physically and financially. Then you have to package up the deal that’s best for you.

And this is where having a top consulting team (for the property, legal, finance & construction aspects) is worth its weight in gold. [Read more…]

Where There’s a Will … There’s a Way

Wills
TO DIE “Intestate” is to die without having made a Will. That means the distribution of your estate would then be in accordance with the law, and potentially against your wishes.

And that’s because, without a Will to provide a clear allocation of your assets and property … estates are divided according to the applicable state or territory legislation.

The legislation provides for the distribution of an estate in light of considerations such as … whether the deceased leaves any partners, children, living parents, brothers, sisters, or children of brothers and sisters. [Read more…]

Industrial Property Starts to Makes Sense

Industrial-Property
INTERESTINGLY, the Industrial property market in metropolitan Melbourne still remains the largest in Australia.

The market has evolved significantly over the last two decades — largely underpinned by the strong growth in supply chain sectors (ie: the transport, logistics and distributions sectors).

In addition, there has been significant infrastructure investment, population and workforce growth … along with the entry of major institutions and developers. [Read more…]

Commercial Property Owners Could Be Saving $’000s in Depreciation

OfficeExterior1
COMMERCIAL building owners still remain unaware of the full taxation benefits their property could generate. One of the most worthwhile (yet often missed) deductions available is building depreciation.

As a building gets older and items within it age, they depreciate in value. The Australian Taxation Office (ATO) recognises this and allows property investors to claim deductions relating to the wear and tear on buildings and the fixtures and fittings within.

Claiming depreciation is the key to increasing the cash flow you generate from your Commercial properties. [Read more…]

As a Developer or Investor … What Should You Expect from Your Project Manager?

Office-Refurb
EVERY CONSTRUCTION or refurbishment project is unique, in its specific requirements and challenges.

Accordingly, each project requires a broad range of skills and experience — which a professional project manager needs to be able to deliver.

So what is it you should be looking for, when appointing a Project Manager? [Read more…]

Be Wary of Bank Bills

BankBills2
Part 2: Remain in Control of your Destiny

LAST WEEK, we made a start on understanding the pros and cons of Bank bills. But you also have other options.

Non-bill facilities are available through the big four banks, but are generally priced in a way as to only be competitive at smaller loan amounts.

While the big four banks are generally able to price better than smaller lenders, there are other factors considered to be important than merely the cost. And for small business, the interest rate on their borrowing is a relatively small consideration, in the overall scheme of things.

Far more important is access to credit, and flexibility of being able to draw up and down on that credit. Because, having this ability will reduce your overall interest costs in the longer run. [Read more…]

The New Victorian Fire Levy

FireLevy
THE RECENTLY passed Fire Services Property Levy Bill 2012 will introduce an additional annual levy upon all Victorian land from 1 July 2013. And this is intended to create a more equitable system for funding Victoria’s fire services.

Currently, a fire services levy is imposed by insurance companies upon Victorian land owners who have taken out policies to insure their property. As insurance companies are required to provide funding to Victoria’s fire services, this levy is designed to cover their contribution. [Read more…]

Retail Sector Still Patchy

RetailPatchy
IN RECENT TIMES, the entire retail sector has been hit on two fronts — with local traders having been challenged by both the highest-rated in dollar, and weakened global economic conditions.

Plus, you’ve also seen a structural shift in how modern consumers are choosing to engage in the market — with the continued growth of online consumer purchases.

The effect of Global uncertainty [Read more…]

FAQs About Depreciation

Depreciation
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.

1. What actually is Depreciation? [Read more…]

How to Complete a Building Project on Time & on Budget

ProjectManagement2
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…]