Limit The Security You Grant to Your Lender

Security

IN MY LAST ARTICLE, you read about the various securities lenders can take over your property, in addition to mortgages.

This article will highlight various options for improving your security position when borrowing as a means of maximising your asset protection. [Read more…]

Different Ways For You To Add More Levels

MoreLevels

WITH VACANT LAND becoming more and more scarce within close proximity to Australia’s major city centres, it has become increasingly necessary to develop or extend existing properties.

However, as a Commercial property owner, how should you to tackle this dilemma? [Read more…]

The Previous “BEWARE” … Has Now Become LAW!

High Court Ruling

THE LANDMARK DECISION of Willmott has recently been upheld by the High Court. The decision confirms that a liquidator has the ability to disclaim a lease, meaning that the tenant will no longer hold a leasehold interest in the land.

In our article published in September last year, a case summary was provided of the Victorian Supreme Court of Appeal decision. This article will focus on the reasons provided by the High Court. [Read more…]

Know Your Depreciation BEFORE You Purchase

Available-Deprn

BEFORE YOU PURCHASE a Commercial investment property, make sure you crunch the numbers. If you appropriately claim property depreciation, you can significantly increase the return on your investment.

What Deductions Can You Make?

More often than not, investors fail to realise the financial benefit of claiming depreciation prior to making their purchase. [Read more…]

How to Rectify Your Non-Complying SMSF

SMSF-3

LET’S REFRESH: In Part 1 we looked at areas of non-compliance; and then moved onto the potentially draconian tax consequences in Part 2.

If you have a non-complying SMSF, this final instalment will give you some direction (and hope) as to the action you can take.

If you have admitted that you are non-compliant to the ATO, the following considerations will determine your outcome. [Read more…]

Will Commercial Property Keep on Performing?

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Ford-Holden

THERE HAS BEEN a whole lot of negative talk recently about the detrimental impact of the Car Industry leaving Australia.

And clearly, our hearts go out to all the affected workers and their families in car manufacturing and those related component suppliers.

Most of us cannot even begin to imagine the shock and surprise they are now feeling — particularly right on Christmas.

And yet, if you just focus upon the likely impact on the Australian economy … much of the commentary can be seen as misguided. [Read more…]

Does Your Self Managed Superannuation Fund (SMSF) Comply?

SMSF

IF YOU HAVE made a mistake with your SMSF, there is no point burying your head in the sand hoping it will go away!

There could be serious taxation consequences if you do have a non-complying SMSF.

The following series of articles looks at how you can manage SMSF problems … so that you can end up in great financial shape, focused and ready to invest appropriately over and over again. [Read more…]

Are You Interested in a Strategic Opportunity?

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658South

ONLY THE OTHER DAY, I gave you some advance notice about this exciting new Project located in South Road, Moorabbin.

And now that the marketing campaign has formally begun, it is certainly generating a fair amount of interest. [Read more…]

Do Banks Use a Formula When Lending on Commercial Property?

Getting the Money you need for your Loan

BANKS have a variety of ways of analysing a Commercial property; but there are a few guidelines they all tend to use.

For them, the most important number is the property’s Net Operating Income — which is basically rental minus expenses. As simple as that may seem, the calculation can vary dramatically from lender to lender.

Calculating the Net Operating Income is fairly straightforward. [Read more…]

Why Do Some Investors Fail at
Commercial Real Estate Investing?

 

Reason #1: Lack of Research

Doing your homework will ensure Commercial property success Most investors fail to properly research the market and understand the relationship each sector (office, retail & industrial) has with the local economy, nearby competition and the marketplace itself.

Reason #2: Poor Analysis

Many investors fail to thoroughly analyze and research their chosen properties as far as the overall economics, calibre of the tenant and any related risks that may be involved.

Reason #3: Lack of Commitment

Investing in Commercial property requires a reasonable degree of hands-on involvement. Some investors make the mistake of believing they can be absentee landlords. You at least need to be involved at a strategic level.

Reason #4: Over Borrowing

Negative gearing is fine. But you still need to start with sufficient equity, to ensure that your investment is not over-leveraged. Always keep some funds aside for unforeseen issues that may arise.

Reason #5: Lack of Understanding

The ownership of Commercial property needs a basic understanding of things like … tenancy law, building construction, how to add value, recognising market trends and so on. All of these can be very easily addressed.

Reason #6: Price vs Value

Some beginners tend to believe a cheap price means good value and a sound investment. Instead, you need to look behind what is being presented to discover the true underlying value.

Reason #7: Over Estimating Your Skills

To be a really successful Commercial investor, you need to build up a trusted team around you — to provide valuable input in the areas of …

  • Analysis and due-diligence,
  • Negotiating the purchase,
  • Vetting the documentation,
  • Ongoing property management,
  • Determining the time to sell.

Reason #8: Lack of Diversity

After you’ve purchased your first property, you need to widen your perspective — both geographically, and across the various sectors of Commercial property. Never simply have all your eggs one basket.