Beware of Latent Conditions or Undocumented Scopes

Latent Conditions

ARE YOU AWARE of your latent condition or scope of work costs? If you are investing or developing you should have contingency funding set aside for these expenses.

Latent Conditions

Latent conditions can take many forms. You should know what kinds of latent conditions exist so you have a better picture of the possible rectification costs of these issues. [Read more…]

At last, Something Nifty for Commercial Property Investors

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FOR THE PAST month or so, I’ve been working behind the scenes to produce this free App … the Hi-Return Filter. And it was released only last week.

You see over the years, I have noticed how even seasoned investors can sometimes make subjective judgements, about the potential of certain properties.

What this App does is take your 8 Investment Objectives and neatly combine them with your 12 Buying Criteria. And then, create an inter-active matrix … which allows you to objectively shortlist your potential properties. [Read more…]

With Commercial Property … Balance Wins the Day

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Sub-Lease-Space-L

THIS CHART APPEARED as part of a recent article in the Financial Review, by Mercedes Ruhl (30 October, page 41).

The article reassured investors that the anticipated short-term surge in sublease space (within Australia’s CBD Office markets) has simply not eventuated.

“Sublease space spikes at times when the economy is weak and business confidence is low because companies are restructuring and downsizing.”

Furthermore, the article suggests the overall amount of sublease space is expected to fall sharply over the next few months — following the post-election improvement in business confidence.

And of all the capital cities, the CBRE research shows Melbourne has provided the greatest improvement over the past year. [Read more…]

Depreciation Differences: Part 2

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Commercial Vs Residential Property.

LAST WEEK, we covered the different types of Depreciation and the depreciation rules for tenants in Commercial properties.

Read on now, for the rules for claiming occupancy in a Commercial/Residential property — plus another useful tip, when it comes to when claiming deprecation. [Read more…]

Commercial Property and The Baby Boomer Dilemma

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Baby-boomers

YOU MAY RECALL several blogs in the past about Baby Boomers … explaining the effect they will have upon the property market — both Residential and Commercial.

In 2005, I warned investors that: If you hadn’t sold your traditional inner-city family home by 2010-11 … you had better be prepared to hold it until 2025.

My reasoning for this was NOT that there would be any fewer buyers. Rather, they would be five times as many of these homes on the market — as baby boomers sought to downsize en masse. [Read more…]

Commercial Vs Residential Property … What are the Depreciation Differences?

ComVsRes-Depn

THIS IS THE FIRST of a 2-part article, to help provide you with a useful comparison between the depreciation of Commercial and Residential property.

Investors considering purchasing an investment property will often enquire whether a Commercial or a Residential property will provide them with more deductions in the form of depreciation.

However, there are many important factors you need to be aware of when making a choice between these two investment options. [Read more…]

Watch Out for the Hidden “Soft” Project Costs …

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DEVELOPMENTS generally comprise two types of costs:

  1. SOFT costs being the Designers, Engineers, Planners, Project Managers, Cost, Planning and Specialist Consultants.
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  2. HARD costs, which are actual physical building costs, Builder preliminaries and Contingencies.

Both of these costs need to be managed. But there are two specific traps to avoid when reviewing initial planning soft costs — so that your soft costs do not blow the budget later on. [Read more…]

Debt Recycling & CGT for Your Commercial Property!

DebtRecycle

DEBT RECYCLING INVOLVES converting bad debt into good debt. In other words, converting debt you cannot claim as a tax deduction into debt that you can.

This can be a little complicated to explain so take a look at a couple of practical examples. [Read more…]

Tenants — Beware When You Fall Behind With Your Rent!

payment-overdue

WHILE THIS MAY have be written from a Tenant’s perspective … the message is equally valuable for Landlords, owning Commercial investment property.

Many landlords, tenants (and legal practitioners for that matter!) do not appreciate the significance of a default clause in a commercial lease that deals with the non-payment of rent. [Read more…]

Have You Considered Non-Conventional Lenders for Commercial Property?

Lenders

LIKE MOST COMMERCIAL PROPERTY investors … you are mainly concerned with obtaining the best rates and terms possible, when it comes to funding options.

As a general rule, you will find these with the major and second tier banks — their cheap cost of funds are able to on-lend at often attractive terms. And in the current environment of high competition for business and low interest rates, the bigger lenders are a good place to start. [Read more…]

Do You Have an Asbestos Register for Your Older Commercial Properties?

Asbestos-Removal

IF YOU OWN an Australian property built prior to 1980, there is an increased chance that some form of asbestos material was used in its construction.

If left intact, asbestos does not usually pose a health risk. However, when asbestos has been disturbed or damaged — the fibres within it become a health concern to anyone exposed.

Asbestos is Your Responsibility

Due to the serious health risks associated with asbestos, there are now laws relating to asbestos in most states and territories across Australia. [Read more…]