Forum Replies Created
The Aussie Julian is very obviously a charitable gentleman, and I am without doubt a cheeky b
. Maybee I should change my sign-in to ‘Cheeky B’. Whaddayathink?
Julian (NZ)Judith, probably largly tax deductable too, but can’t help but think that a lot of people slow their wealth building processes by spending a king’s ransom on seminars. Very often much of the information is available in books – and librarys are free.
JulianTo kill all fascists and dictators to make the world how I want it so we can all live happily and peacefully (stole it from George dubya).
JulianJust because you’re paranoid doesn’t mean they’re not out to get you!
JulianWelcome to NZ’s biggest playground, The South Island. Hope you enjoy it.
Cheers, JulianKenzhang, while the queen continues to be the reining monarch of Australia a day off is given in her honour. (I believe most Commonwealth countries do this) When/if Australia becomes independent the day off will be probably be switched to the “Presiding Leader’s day”.
However, there is no obligation on you or anyone to celebrate it, but if you wish to you may.
There is a valid argument for debating whether significant Christian religious days should be public holidays, or for that matter whether any days unworked should be paid for. The self employed don’t get them!
That said, I don’t think there would be too many votes to be had in suggesting any reduction in the number of paid statutary days off, and any implementation of such an idea would probably have the unions close the country down.
Here in NZ the PM has amended the holidays act to increase paid annual leave from three to four weeks (effective 2007 – after the next election). It’s a guaranteed vote puller that will cost the country. If she wanted to give something to all NZers why not reduce the tax rate – that would have added a boost to the economy while putting more money in all working NZers pockets. As for me, apart from my investments, I don’t get paid when I don’t work – and I have no problem with that. I’m starting to ramble now so I’ll shut up.
Cheers, Julian.Redwing, there is only 12 months to run on the lease – which means you could soon be looking for new tenants soon. Will it re-lease easily at the same or a better rate if your tenant does not renew? How does the value compare with other similar offices? Does it need refurbishment? New office tenants sometimes ask for you to refurbish the property for them to sign the lease. Suggest you talk to agents in the area, check the lease, talk to the tenants (if poss), check the title, find out about finance, do your sums and only if it all adds up, get a valuation, then proceed cautiously if it still looks good. Remember, commercial finance not only requires a larger deposit (unless you have additional security) but also attracts higher interest rates from lenders. That said, the yeilds are usually far in excess of residential, and the headaches usually far fewer. Personally I wouldn’t even consider something with such a low yeild (7.5%) unless there was significant upside ie the rent was substantially less than it should be and there was high demand, or if there were development or other opportunities.
Good luck, JulianSuppose the negative gearing works at your current income level and while interest rates are low and while property is hot, but what if one, or worse, a combination of the above falter? Don’t forget that property is cyclical, and after a boom a bust is sure to happen. In a situation where the bulk of one’s investments are negatively geared all one’s equity could be wiped out fairly quickly. And that’s when the wiley old foxes that have been accumulating cash suddenly start buying up all the foreclosures at bargain prices. Just a thought!
Cheers, Julian.S-I-S, Thanks for the offer but board games don’t really do it for me, not even Monopoly. For recreation I prefer chasing naked young women around the smimming pool. Trouble is the women I would like to chase have too much good taste. Still the mind can dream… Oh yes, the other problem is I don’t have a swimming pool.
Cheers, Julian.Michael, it’s all about prioritising, making changes, sacrifice and doing the hard yards. Do you want it enough, and can you convince your family to run with you because it is going to pay off for them in the long term. The worthwhile things take a little effort, and can cause some temporary discomfort. But for many, myself included, it is definitely worth it in the long run. It’s also about doing things smarter rather than harder and Steve’s book and this forum are a good start.
Good luck, Julian.PeterP, I’m going out on a limb here because it could be that Australian and NZ taxation rules are slightly different in terms of claimable expenses, but I put the above scenario to my accountant and he said costs (and remember this is NZ I am talking about) involved in a property purchase are capitalised and depreciated, that is they are not directly claimable, but if one is to go to an area to check it out generally (as in, ‘to get a feel for an area’) it is a business expence, and can be claimed accordingly. Are there other accountants on either side of the Tasman that can verify this?
Cheers, Julian (not the same Julian that posted earlier on this site)Good on you for checking out a commercial deal – they’re not as easy to purchase as residential, but the returns are usually better and the headaches are usually less. Lenders may be more inclined to loan to 80% or higher if you have additional security (not nec yours – it could be a family member or someone very trusting of you), or possibly if there is a very long and secure lease ie 10 yrs. So perhaps you can talk to the tenant and find a way to encourage him/her to ammend the lease (assuming it is not that long) in exchange for some consideration on your part.
Good luck, Julian.Hey, you get better odds on the Wallabies when betting on them from this side of the Tasman! But your point is taken.
Regards, Julian.CheekyOldBat, SLA are a strange set of initials to apply to the term, “Native Title”
Regards, Julianjancrows, tongue was very firmly lodged in cheek! But, anyway, what is “SLA”?
Julian.Michael R, but if you became a NZ citizen and listed NZ as your primary place of residence then any monies taken to Australia would surely be as a NZer taking funds to another country, and therefore not subject to capital gains tax in Australia. I actually had my tongue in my cheek when I first muted the idea, but on further consideration thought it could be viable. Changing nationalities would not warrant consideration for the great majority, but thought it was worth exploring as an idea. Thanks for your reply.
Regards, JulianPM Maurice, what melbear said was pretty well spot-on. Important to check out the lease document, title, and due diligence on the building and area. The reason banks have a higher LVR is because they perceive risk to be higher. It is therefore very important that you get a location that is going to be easy to relet when/if the current tenant leaves. It is also important to check that the current tenant is not paying a rent that is in excess of the market rates, otherwise the rent and value of your building could reduce on review or renewal. Industrial buildings are generally easier than retail or office Hopefully the lease will have a ratchet clause that procludes the rent from reducing. Hopefully, also, the lease is for a long term and has the tenant paying ALL the outgoings including gas, power, rates, insurance, insurance valuations, repairs and maintenance, body corp levies etc. If all of the above is fine and due diligence checks out then it sounds like a good deal. I might be interested in buying it if you decide to pull out – you could e-mail me on [email protected]. I could handle a little business excursion to Tassie every so often, and would pay you a modest finders fee if I proceeded. Best of luck if you decide to go ahead, and don’t forget to do your due diligence on the tenant. The best lease in the world won’t do you much good if the tenant is flat broke with no assets. One of my tenants recently bought himself a new Monaro and I can’t tell you how assuring that felt. Good to see there are others out there that see the merits of commercial property. Personally I love it and wouldn’t go back to residential for all the tea in China – see Appendix C in Steve’s book as to why!
Julian.Achan6, as someone who has spent more than a few dollars on seminars and on books I say that by far the better value is with the books. You can borrow them from the library rather than purchasing them if you would like to be totally focussed on saving for your deposit.
Good luck, JulianCan anyone please explain to me what justifies paying so much for the Cashflow game vs so little for Monopoly? Cashflow is promoted as teaching financial literacy, but my opinion is it’s more about providing financial well-being to Bob Kiyosaki!
I have played both games and neither come close to the real deal of property investing, but if I had to buy one it would be Monopoly – as it costs less and therefore leaves me more money for investing.
And if it’s entertainment one is after there is plenty to chose from for less than $400.
Cheers, JulianWhat a great find this posting has turned out to be. For any kiwi readers willing to search through second hand bookstores it could be worth your while trying to find yourself a copy of Jones on Property by Bob Jones (out of print). This book influenced my decision to get right out of residential property and into the much more stimulating genre of commercial. Bob Jones is sarcastic, witty and thoroughly inspirational. He somehow managed to finance and build a six story high rise in the Hutt area (north of Wellington) when he was in his early twenties, circa 1962.
Property Investment by Martin Hawes (Shoal Bay Press) is another good read, a “How To” book filled with plenty of good common sense ideas, and some not so common.
Happy reading, Julian.
