6 Ways to Enjoy Your Extra Cash from Depreciation

AS AN A INVESTOR, once you start claiming depreciation, you’ll notice a big improvement in your cash flow.

That’s because depreciation effectively lowers taxable income – and that means more money back in your pocket come tax time.

For most investors, the extra cash goes into savings. Or is put towards a holiday, or a new car. Or simply used for everyday living expenses.

However, there are far smarter ways to use the extra cash you gain from depreciation. And here are just a few. [Read more…]

Capital City Office Markets Around Australia

AS I EXPLAIN to my Mentor group, there is a certain rule of thumb for Office market vacancies around Australia.

And it’s really quite simple: For an office market to be “in balance” you really need to have a vacancy rate of between 6% to 8%.

It’s a bit like the unemployment rate. You see … a 5% unemployment rate – effectively means FULL employment – because anything lower than this … is starting to put pressure on wages.

Similarly, you need a 6% to 8% vacancy rate with offices – so that companies can legitimately upsize and downsize, with sufficient availability of space. I did indeed burn advice were the normal recipe

Anyway, here is the latest snapshot (courtesy of Savills Research) … as at August this year.

As you can see from the table, both the Sydney and Melbourne markets have firmed to where they have a vacancy rate of 4.6% and 3.6% respectively. On face value, this would normally indicate both markets are getting somewhat overheated.

That may be the case with Sydney. However, Melbourne does have some space coming onto the market shortly – which will probably push its vacancy rate up closer to 6% – returning to a more balanced position.

You have seen the Perth, Adelaide and Brisbane markets show some improvement over the past few months – to where their vacancy rates are personal currently sitting at 19.4%, 14.7% and 14.6% respectively.

What does this mean?

Right now for investors … the Sydney market would appear to be at (or close to) its peak. However, the Melbourne market should still provide you with some good upside over the next few years.

Whereas, the other capital city markets have not really yet bottomed out as yet. And you’d have to expect it is still a little while yet, before those three CBD office markets would be considered attractive.

Hopefully, that gives you a quick overview of what’s currently going on.

Freehold Vs Leasehold – What Does This Mean for Depreciation?

LET’S USE HOTELIERS as an example. When they request a tax depreciation schedule for their property, there are usually three main scenarios:

  1. Freehold, which is where the client owns the building only, not the business that operates from it.
  2. Leasehold, where the client owns the business only, not the actual property.
  3. The client owns both the business and the building.

[Read more…]

4 Things to Consider When Fixing Your Interest Rate

WHEN INVESTING IN Commercial property, one of the major attractions for investors is the cashflow available. And locking in a guaranteed cashflow, via fixing your loan can be an attractive strategy.

However, there are a number of things that should be considered, before deciding to fix your interest rate. Here are some of the most important questions to ask yourself when deciding. [Read more…]

Super Funds Are Dominating Commercial Property

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DID YOU KNOW super fund members are some of the biggest landlords in our capital cities?

They own a share of offices, hotels, warehouses and shopping centres. The more cash in super funds, the more properties are bought – indirectly exposing fund members even to some of the most iconic office towers in capital cities. [Read more…]

5 Tax-time Tips for Commercial Property Owners


With tax time upon us, many property investors will be preparing to visit their Accountant to complete their annual income tax assessment.

Getting your tax in order can be a confusing task at the best of times, but when you’ve got a commercial investment property, it can get even more complex. [Read more…]

Purchase a Commercial Property Wisely Through Your SMSF 

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THE HIGHER RENTAL RETURNS of commercial property make it more attractive to investors, especially those who are planning for their retirement. They often buy and hold commercial properties in their SMSF for a better tax environment. [Read more…]

Why You Should Have Your Commercial Lease Prepared by Professionals


QUITE OFTEN THE QUESTION will arise, as to whether you need incur the cost of having a lawyer to prepare your commercial lease. And perhaps the answer is best found in this case study. [Read more…]

The Manifesto of a Truly Motivated Investor

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LAST WEEK, I was in touch with a number of my current subscribers – simply to confirm whether they would like to take their interest in Commercial property to the next level.

This was not intended to involve my personal Mentor Group. Rather, it was an invitation for those of you who might not be quite ready to invest … but nonetheless, are serious about investing.

And more importantly, motivated to learn as much as possible – to ensure your success, when you feel you’re ready to invest in Commercial property. [Read more…]

How The Royal Commission Will Affect Bank Lending


SINCE DECEMBER of last year, the Federal Government has been conducting a Royal Commission into the banking industry, as well as financial and superannuation services in general.

Some areas covered so far (relating to lending practices) have included commission structures for brokers and staff, as well as cash incentives being offered by banks. [Read more…]

Depreciation: The Rules May Change … But Your Goals Remain The Same


THOSE OF YOU considering the purchase of an investment property often ask whether a commercial or a residential property will provide them with more deductions in the form of depreciation.

As you will appreciate, there are many important factors an investor needs to be aware of – when making your choice between these two investment options. [Read more…]