Claiming Depreciation Can Transform Your Bottom Line

BMT-Tax

IN MANY CASES, commercial properties are positively geared. And that means their rental returns are often higher than loan repayments and outgoings for the property.

What what you may not realise is that the income received from a positively geared property can have avoidable tax implications.

Claiming depreciation on a positively geared commercial property can help you substantially reduce your overall taxable income, and further improve your after-tax cash position.

Perhaps a Case Study would help … [Read more…]

Control The Loan Process

Commercial-Loan-Application

THE OTHER DAY, I was doing some analysis on the loans lodged over the past year … looking at the time-frames, and where the delays have occurred.

And I was struck by the number of stages a loan application needs to go through, before settlement. Plus the number of people the file depends upon, to go smoothly.

The people involved in this process can include the broker, the bank officer, credit analyst, valuer, borrower’s solicitor, bank’s solicitor, vendor’s solicitor, accountant, financial adviser (if financial advice is required), real estate agent and, possibly, the tenant.

As you can appreciate, delays can occur at the hands of any of these stakeholders with dire consequences. That’s why it is advisable (as far as possible) for you to retain as much control over the process as you can … in order to avoid potential pitfalls. [Read more…]

Detect Hazardous Materials BEFORE Demolishing Begins

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HAZARDOUS MATERIALS are found in a range of locations, forms and types of building structures; plus they are not just limited to Commercial projects. Unfortunately, they are widely spread through residential and public properties as well.

The identification process is the first step for anyone wishing to undertake alterations, demolition or disturbance of materials — which could be potentially harmful to workers, or the general public. And then, you need to quantify the cost of rectification; and what effect that will have upon your intended project.

3 Key Questions to ask … [Read more…]

With Commercial Property Managers … What Should You Expect?

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Commercial-Property-Management

OF COURSE, everyone’s expectations will differ as to how your property should be managed. But over the years, my clients have provided a few clues. And these have been rather helpful in creating a simple checklist.

Good Property Management is the Key to Your SuccessAnd so once you’ve finally acquired a suitable Commercial property, any ongoing Management will need to make sure that … [Read more…]

Maximise Your Tax Benefits on Commercial Property

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WHEN INVESTORS purchase a Commercial property, they will often consider renovating the property after settlement. Especially, if it is an older property in need of a face-lift before tenanting.

By renovating your Commercial property, you can create additional equity and generate extra rent in the process. But the real benefit is that you can also claim thousands of dollars in depreciation deductions — whenever renovations are done to your property. [Read more…]

Due Diligence: 5 Key Issues to Verify + Questions to Ask!

Due-Diligence
WHENEVER YOU embark upon a physical Due Diligence for any Commercial property, there are five key issues on which you should focus. And all of them need to be fully explored.

Depending on the size and type of the building, you may well require a more-detailed analysis. But for the time being, this will provide you with a basic checklist. [Read more…]

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…]

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

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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…]

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

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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…]

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…]